Stellar’s XLM is subject to giving up the big $0.10 level. Across the board there have been a several key psychological price breaks. Cryptocurrencies are being forced to give way, due to strength of the current bear market. When prices drop below these closely looked at levels, it only seems to spark further worry and panic. A fresh wave of selling pressure is then invited. Over the past five weeks, XLM/USD has fallen a chunky 63%, from the $0.29 territory, down to a recent low of $0.1010.
Consolidation Mode – Bears Rubbing Paws Together
Over the past four sessions, there has been some stabilization following the deep push on 6th December, where XLM/USD fell to $0.1010. The price is moving within consolidation mode, something that is seen across the market. Technically, this only spells more danger – a calm before the storm potentially for cryptocurrencies. This type of behavior has been seen over and over again during this aggressively stubborn downward trend.
What if $0.10 is Breached?
As noted on numerous occasions, this move is uncharted territory already, falling from the heights seen at the start of the year. Market participants are already fueled with a serious amount of FUD, so such technical breaks will only cause more damage. This isn’t due to anything fundamental relating to the Stellar foundation, as their developments continue to remain very much sound and strong. One must gauge how further this can fall, via XLM/BTC chart view.
Technical Review – XLM/BTC
XLM/BTC continues to flirt with a critical area of support, and a failure to hold will be catastrophic. This zone held in the most recent fall on 7th December; despite the long lower wick below, the price still managed to close above. XLM/BTC has not been and closed below 0.000035 territory since September 19th. Should a breach occur, which if the current pace of momentum maintains its course could very well happen, another 8% drop may follow.
Lastly, it is worth keeping an eye out of the potential formation of a head and shoulder pattern. The left shoulder and head have been crafted via XLM/BTC daily chart. There is certainly a possibility that the bulls come back to life, forcing a bounce at the above-mentioned support. A right shoulder could then move towards heights back within the $0.00004000-4500 range. This is where the next major of supply can be observed.
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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