Stellar (XLM) recently experienced a strong gathering, pushing Altcoin prices to a higher level. However, last week, prices have faced considerable consolidation. The signs of a potential reversal are more apparent as Altcoin struggles to break a critical resistance level of $0.50.
XLM has seen notable volatility over the past 24 hours, suggesting that prices may continue to face downward pressure in the near future.
Star investors are pulling back
The parabolic SAR above the candlestick indicates that the downtrend of XLM is beginning to gain strength. This technical signal suggests that bearish momentum is entrenched, making it difficult for Altcoin to push beyond the $0.50 resistance.
However, active golden crosses currently in existence may neutralize the effects of downtrends. Golden Cross is usually a bullish indicator of long-term upward movement.
Despite the recent bear signal, it could provide the support you need to slow down XLM’s price drop.
The overall macro momentum of XLM shows the mixed signal, as reflected in the Chaikin Money Flow (CMF) indicator. Last week, the CMF reached an eight-month height, signaling strong influx and bullish sentiment.
However, the indicators have since started to decline, suggesting that purchasing pressure is weakening. Nevertheless, the CMF remains above the zero line, indicating that inflows are still above the outflow.
A CMF below the zero line indicates that the outflow is dominant. This is a negative XLM signal. A further decline in CMF is likely to put further downward pressure on prices, confirming Altcoin’s bearish outlook.
XLM prices can bounce back
XLM prices have fallen 7% in the last 24 hours and are currently trading at $0.45. Altcoin has been consolidated under a $0.50 resistance over the past week and has struggled to make a big profit.
If the spill continues to be dominated, prices could see even more negative side pressure. Failure to violate this resistance level, coupled with weakened momentum indicators, could push the XLM below the support levels of $0.43 and $0.41.
This will make Altcoin vulnerable to deeper fixes, potentially reaching $0.35 in the coming days.
However, if the influx recovers and the bearish trend is neutralised, XLM can find support and make another attempt to violate the $0.50 resistance.
A successful violation will invalidate the current bearish paper, with XLM targeting a price of $0.56, indicating a reversal of the recent downward trend.
Disclaimer
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