Stellar Lumens (XLM/BTC) has been languishing deep in bear territory after posting an all-time high of 0.00006789 in January 2018. On August 6, 2019, the coin broke historic support of 0.000007. This drove the cryptocurrency to as low as 0.00000601 on August 9th. At that point, Stellar Lumens lost over 91% of its value from the top.
Nevertheless, it appears that the crypto token is trying to carve a short-term bottom. This opens a decent opportunity to consider long positions.
Technical analysis shows that XLM/BTC is forming an ascending triangle pattern on the four-hour chart. The pattern indicates that bulls are slowly gathering their forces to take out immediate resistance of 0.000007.
So far, it appears that Stellar Lumens is en route to generating a second bullish higher low (wave E) at 0.00000661. If bulls can keep the coin from falling lower, they will attract more bottom pickers and bargain hunters. Fortunately, the daily RSI is favoring this outcome. It is also printing higher lows to indicate the growing bullish momentum.
The strategy is to buy on the breakout and retest of 0.000007 as support. The recovery of this area is crucial as it enables the bulls to reclaim the historic support of Stellar Lumens. This will likely generate the momentum to launch the pair to our initial target of 0.0000079. Take that out and 0.0000126 is next.
The process may take less than a month.
Daily Chart of Stellar Lumens/Bitcoin on Binance
Summary of Strategy
Buy: Breakout and retest of 0.000007 as support.
Targets: 0.0000079 and 0.0000126.
Disclaimer: The writer 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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