• XLM price fails above topside trend line resistance, leaving potential for a bearish candlestick pattern.
  • Daily Relative Strength Index (RSI) conveys a negative momentum divergence today.
  • Historical precedent suggests that social sentiment may be forecasting a short-term high.

XLM price has staggered higher, beginning in April with a marginal new high, then today’s brief spike into new highs. The failure of XLM price above the topside trend line resistance and the 461.8% Fibonacci extension of the 2019-2020 bear market should put traders on the defensive.

XLM price today suggests sellers are in command

Stellar has been a reluctant participant in the cryptocurrency rally of 2021, achieving modest gains following the multiple breakouts of this year. The unfolding breakout today is beginning to appear like another brief new high. 

The XLM price failure today has retraced half of the intra-day gains, and if the selling continues, it will create a bearish shooting star candlestick pattern on the daily chart. The candlestick’s real body should not be more than one-third of the entire candlestick range, and the lower shadow should be non-existent or minor. Additionally, the longer the upper shadow, the greater the bearishness.

The shooting star pattern highlights how buyers are struggling to lift prices higher. Still, they are eventually overpowered by the sellers, who successfully push prices lower and into the bottom range of the candlestick. It signifies that bearish traders have seized control of the price direction.

At the time of writing, XLM price is not set to close with a shooting star pattern, but bearish speculators should be watching into the daily close. The pattern would confirm a bearish outlook for the cryptocurrency and raise the odds of a correction.

To further add to the heightened level of concern, the daily RSI’s failure to match the price with a new high continues the bearish momentum divergence that began in April.

Downside support begins at $0.576, followed by the minor rising trend line at $0.556 and then the 361.8% extension of the 2019-2020 bear market at $0.546.

More weakness will discover support at the 50-day simple moving average (SMA) at $0.506.

XLM/USD daily chart

XLM/USD daily chart

A general rebound for the broader crypto market may permit XLM price to gain traction and help it avoid the bearish shooting star alternative. The only upside target of note is the convergence of the 161.8 extension of the April decline at $0.981 with the psychologically important $1.00.

According to the data from over 1000 crypto-related channels, including Telegram groups, crypto reddits, discord groups, and private trader chats, Stellar’s daily social volume has spiked today to the highest level since the end of January. The increase in XLM mentions illustrates that retail speculators are closely following even this marginal new high.


XLM related mentions on social media

XLM related mentions on social media

Greater social interest often accompanies price highs, sometimes significant and other times minor. Either way, it adds to the caution and should be kept in mind when entering and exiting trades as changes in sentiment can often have adverse effects on a digital asset’s price action.


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Recommended content


Recommended Content

Editors’ Picks

Polygon joins forces with WSPN to expand stablecoin adoption

Polygon joins forces with WSPN to expand stablecoin adoption

WSPN, a stablecoin infrastructure company based in Singapore, has teamed up with Polygon Labs to make its stablecoin, WUSD, more useful in payment and decentralized finance.

More Cryptocurrencies News
Coinbase envisages listing of more meme coins amid regulatory optimism

Coinbase envisages listing of more meme coins amid regulatory optimism

Donald Trump's expected return to the White House creates excitement in the cryptocurrency sector, especially at Coinbase, the largest US-based crypto exchange. The platform is optimistic that the new administration will focus on regulatory clarity, which could lead to more token listings, including popular meme coins.

More Crypto News
Cardano's ADA leaps to 2.5-year high of 90 cents as whale holdings exceed $12B

Cardano's ADA leaps to 2.5-year high of 90 cents as whale holdings exceed $12B

As Bitcoin (BTC) gets closer to the $100,000 mark for the first time — it crossed $99,000 earlier Friday — capital is rotating into alternative cryptocurrencies, creating a buzz in the broader crypto market.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: New high of $100K or correction to $78K?

Bitcoin: New high of $100K or correction to $78K?

Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP