• XLM price nears the apex of a symmetrical triangle continuation pattern that has been forming since June 21.
  • Stellar failing to hold the critical support at the 50-week simple moving average (SMA).
  • The oversold condition in June has not evolved into a substantive rally in XLM price.

XLM price is nearing the latter stage of a symmetrical triangle pattern formed in response to the noteworthy oversold condition on the daily Relative Strength Index (RSI). As a continuation pattern, the probabilities are tilted towards a bearish resolution and potentially a new low for Stellar.

XLM price has nowhere to go, but down

XLM price closed 2Q down almost 30%, making it the worst quarter since 3Q2019. The overall decline of 75% from the May 16 high of $0.797 was highlighted by a May 19 loss of 29% and a June 20 loss of 20%.

Since the June 22 low of $0.198, XLM price has been coiling in a symmetrical triangle pattern, releasing the oversold condition but not revealing many clues as to the directional intentions of Stellar moving forward.

Two levels have been pivotal to XLM price during the development of the symmetrical triangle; the May 23 low of $0.274 and the exacting 50-week SMA at $0.269. Combined, they have served as a magnet for Stellar, sometimes offering resistance and other times providing support.

XLM/USD weekly chart

XLM/USD weekly chart

The measured move of the symmetrical triangle is 50%, projecting a final XLM price of $0.127. It would erase most of the 2021 gains and generate a loss of over 80% from the May high.

A more reasonable and higher probability scenario is for XLM price to sweep below the June 22 low of $0.198 and bottom in the vicinity of the 78.6% Fibonacci retracement of the March 2020-May 2021 advance at $0.191. It would represent a 25% decline from the current price.

To trigger the symmetrical triangle pattern, XLM needs to trade below $0.250. Selling should accelerate after that, as the 50-week SMA and the bearish Death Cross pattern press on Stellar.

XLM/USD daily chart

XLM/USD daily chart

XLM price can avoid the bearish thesis with a daily close above the union of the May 23 low of $0.274 with the triangle’s upper trend line, currently at $0.284. If successful, Stellar may rally to the declining 50-day SMA at $0.336 or the apex of the previous symmetrical triangle at $0.343.

To review, XLM price designed a symmetrical triangle following the crash in May, and as a continuation pattern, Stellar resolved to the downside with a 40% decline in June. Now it has plotted another symmetrical triangle following a drop. If precedent holds, XLM price is about to have a moment of déjà vu.

The bottom line is that Stellar investors need to be prepared for the third leg down of the correction that began in May.


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

US presidential election outcome could shape the future of crypto

US presidential election outcome could shape the future of crypto

US citizens will go to the polls to elect a new president on November 5, and their choice could be key for the future of the crypto industry and thus the price outlook for Bitcoin (BTC).

More Cryptocurrencies News
Bitcoin Price Forecast: BTC recovers as Donald Trump takes lead on polls

Bitcoin Price Forecast: BTC recovers as Donald Trump takes lead on polls

Bitcoin (BTC) slightly recovered to around $68,800 on Tuesday, following a shift in the United States presidential race that saw former President Donald Trump regain the lead, after US spot Bitcoin ETFs experienced an outflow of over $540 million on Monday.

More Bitcoin News
Crypto markets brace for volatility in tight race between Trump and Harris

Crypto markets brace for volatility in tight race between Trump and Harris

The US presidential election is one of the most significant events in the world. Due to the influence of the country’s political decisions, policies, and economic approaches, it can significantly impact crypto and global markets. 

More Cryptocurrencies News
Trump-inspired memecoin MAGA shows bullish on-chain metrics ahead of US elections

Trump-inspired memecoin MAGA shows bullish on-chain metrics ahead of US elections

MAGA (TRUMP) trades slightly down to around $3.4 on Tuesday after rallying more than 20% since Sunday. The former President Donald Trump-based memecoin is poised for further gains as daily active addresses and network growth metrics rise, signaling increased network usage and adoption

More Cryptocurrencies News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

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