Stellar Lumen (XLM) Fails to Bounce Back as Strongly as Other Cryptos
Aiswarya Gopan • 2 min read
On Tuesday, even as the crypto market sentiment improves after Bitcoin rises above the key $40,000 level, one of the digital assets that has been somewhat slow to catch up to the upbeat mood is Stellar Lumen (XLM). Although, the price has strengthened by nearly 3% in the past 24 hours.
After witnessing a rally through most of the bull run that started late last year, XLM’s price tumbled lower during the crypto market crash seen in mid-May. Since then, gains have been mostly limited even during the brief pockets of positive sentiment that have supported other crypto assets lately, reinforcing our forecast for a bearish correction underway in XLM.
On the fundamental front, there have been no significant developments that can propel an uptrend in this digital asset. There was some reason to cheer back in March 2021 about the news that Stellar Lumen invested in DSTOQ to allow global users the opportunity to invest in stocks across emerging markets without charging any commission.
While this was a very promising use case for the blockchain network and set it apart from several of its competitors that were focused on the digital transactions’ space, there has been no significant news about the development gaining much traction among the community.
In addition, technical indicators also point to room for further downside, with the RSI indicator suggesting a bearish bias since mid-May when the crypto market crashed. In all likelihood, this trend could continue until the XLM price enters the oversold territory, from where there could be a reversal in the trend. However, this could take some more days to happen.
Key Levels to Watch
Technical analysis of the H4 chart of XLM/USD reveals mixed signs, with the smaller moving averages and MACD indicator signaling a bullish bias. On the other hand, the larger moving averages and momentum indicator are suggesting a bearish bias.
The price is sitting close to the pivot level with XLM trading at around $0.34, so we could expect price action in either direction. A movement upwards could see buyers test resistance at $0.39 and then at $0.43. On the other hand, if the price slides down, we could see Stellar Lumen’s price break down below $0.30 and even test $0.25.