XLM Price Prediction: XLM poised for massive 27% breakdown, as the technical picture worsens

Stellar is on the verge of a breakdown toward $0.3 if the triangle's x-axis gives in to the bearish pressure.
Selling pressure continues to mount, especially with the MACD diving below the midline.
Recovery will come into the picture if XLM reclaims the ground above the x-axis.

Stellar has recently been rejected from the yearly high of $0.61. Bulls tried their best to secure higher support but failed in that task. XLM continues with the breakdown below a descending trendline that seems to have confirmed a triangle pattern on the 4-hour chart. Meanwhile, Stellar's technical picture appears to be worsening, hinting at a continued breakdown.

Stellar's downside eyes $0.3

From a short-term technical perspective, XLM is poised for another downswing. For instance, the descending triangle pattern on the 4-hour chart is a bearish signal. The pattern is created by connecting a series of peaks with a trendline while a horizontal line links the asset's lows.

A break under the triangle's x-axis results in a breakdown equal to the distance between the triangle's highest and lowest points. Notably, the drop is usually rapid and must be timed correctly to make the most out of it. However, traders must be careful to avoid false breakdowns by waiting for confirmation.

XLM/USD 4-hour chart

The same 4-hour chart highlights a bearish Moving Average Convergence Divergence (MACD). In addition to falling into the negative region, the MACD line (blue) increases the divergence below the signal line. In other words, selling pressure is likely to continue rising, adding credence to the expected breakdown.

Looking at the other side of the fence

The 200 Simple Moving Average (SMA) on the 4-hour chart might support $0.38 and prevent losses from extending to $0.3. On the upside, recovery may come into the picture immediately if XLM reclaims its position within the triangle. The 100 SMA and 50 SMA are expected to delay recovery, but a break out past the trendline will lift Stellar to higher levels.

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.