Stellar Lumens is really heading to no man’s land. XLM/USD is running at its fifth consecutive session in the red, dropping a chunky 25% within this period. The selling pressure has intensified after recently stabilizing and forming a bottom. This was seen between the 25th – 27th November, following the chunky market fall throughout the month of November. The low area was formed around the $0.1350 mark. Bulls not too long after capitalized on this, driving the price up to around $0.1750. This move took XLM/USD into a prior area of demand, which started to act as new resistance.
Bears Break Bottom
Given the strength of this current downside momentum, vital support has been breached. As detailed above, XLM/USD had formed a bottom and observed buyers defending between $0.1450-$0.1350. This has now folded, given the punishing pressure from the bears. There was some technical hope that a strong bounce would have been seen, with a possible double bottom formation. However, that not proving the be the case, with a fresh wave of sellers coming into play. XLM/USD being sent to the south to print a fresh yearly low.
The bears are on course to see a convincing daily close below the recent bottom area. This will likely spark further panic selling or speculative pressure to the downside. Logically, the next major downside target could be the psychological $0.10 cent mark. Should this continue at the current pace lower seen, then that price target can be seen in the coming days or so. A drop down to the price territory would mean another 20% lower from the current level, at the time of writing. It is also worth noting a decent pick up in volumes have been observed, which isn’t too surprising.
XLM/BTC Suggests No Slowdown
Furthermore, analyzing XLM/BTC, it suggests that a slowdown of this current pressure is not likely to stop just yet. The rate is trading at its lowest level seen since October 16th. Next support via the daily view can be eyed at another 4% south. The price may attempt to stabilize down at 0.00003310, this appearing to be a neckline of a possible head and shoulders pattern. The left shoulder has already been formed, with the head currently under way to completion. A firm bounce could be seen here, for the bulls send the price back north, in constructing a potential right shoulder.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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