Stella: Answer Q whether HODLing is still the way to go.


disclaimer: The following analysis results are the sole opinions of the authors and should not be construed as investment advice.

As of this writing, Stellar (XLM) was sailing below the lower boundary of the pitchfork after the recent bearish candlestick on the daily chart. The recent sales boom has set a bearish structure for XLM.

A close below the current pattern could open a path to the $0.12 area and lead to further losses. At press time, XLM was trading at $0.1283.

XLM Daily Chart

Source: TradingView, XLM/USD

After XLM reversed south from the $0.4 zone, the bearish pulled alt and found new pressure to test the $0.16 mark (previous support level). After a series of liquidations, the recent bearish phase fell from this indicator after falling more than 45% weekly towards its 17-month low on May 12th.

With the current structure bearish, the bulls should make a special effort to halt continued selling momentum. This still requires driving high purchase volumes. The current bearish pennant setting could be a spoiler for recent buying efforts.

A close below the pattern could trigger a short-term retreat to the $0.12 baseline. In this post, the bulls will be eager to bridge the overextended gap between the 20 EMA (red) and the 50 EMA (turquoise). In this case, the closing price above the pitchfork will re-ignite the possibility of recovery.

rationale

Capture 52 scaled

Source: TradingView, XLM/USD

RSI compressed in the 36-41 range, highlighting its tangible sales advantage. Investors/traders should take a break to enter buy/sell calls across the current boundary.

Over the past four days, the bearish CMF has marked lower highs in the daily timeframe. However, a rebound from the -0.1 indicator confirms that a bullish divergence with the price exists.

conclusion

Looking at the dominant bearish pattern with weak buying volume, it will be relatively more difficult to sustain a bullish rally. Falling below the pennant can lead to short-term losses or long phases before buyers show up.

Moreover, investors/traders should consider broader market sentiment and on-chain developments to make profitable moves.

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