Stellar: HODLing on to XLM may be a good idea because…
Since reaching its three-year high last year, Stellar (XLM) tested its long-term trendline support and flipped it to resistance in December 2021. Since then, it found newer lows as the bears took over the driver’s seat.
A reliable close below the $0.195 support (white) would prepare XLM for a near-term pullback. Post which, it would likely continue its breakout rally from the $0.17-$0.19 demand zone. At press time, XLM traded at $0.1954, down by 1.18% in the last 24 hours.
Source: TradingView, XLM/USD
Since XLM struck the $0.8-level, it turned downward and traded between the $0.19-$0.39 range for over eight months. The recent bearish phase marked a down-channel (white) on its daily chart as the alt lost nearly 63.4% (from 10 November) and hit its 13-month low on 24 February.
During this phase, the 20 EMA (red) posed as a strong barrier for the bulls. They strove to find a sustainable close above this level for over three months now. Meanwhile, XLM fell below a crucial area of value at its Point of Control (red). The fall halted at its 14-month ($0.16) support, where the buyers stepped in to initiate a 24.6% recovery that led to a down-channel (yellow) breakout.
With the recent gains, the bulls have created a strong demand zone at the $0.17-$0.19 range. This range has historically been a good trigger for a reversal. Can history repeat itself? If the price finds a close below the $0.195 level, a pullback towards the $0.1906 could be conceivable before the alt picks itself up. Such a revival could test the upper channel that also coincided with its 50 EMA (cyan).
Source: TradingView, XLM/USD
The RSI was in an uptrend over the last nine days but still needed to close above the half-line to confirm the change in momentum. Also,
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