On Apr 25, the price of Stellar lumens reached a high of $0.107 and €0.095. A sharp drop ensued, which took it to lows of $0.094 and €0.084 the next day
The price has been increasing since, reaching highs close to $0.11 and €0.092 on May 3.
How long will the increase continue?
Let’s find out:
Stellar Lumens (XLM): Highlights for May 6, 2019
- The price of Stellar lumens has been on an uptrend since Apr 26.
- It broke down from an ascending channel on May 6.
- The breakdown occurred on average volume.
- There is resistance near $0.101 and €0.086.
Current Trading Pattern for Stellar Lumens
In this section, we analyze the price of XLM/USD at one-hour intervals from Apr 25 to May 6 to trace the current trading pattern. In order to avoid confusion, we will not be using images of the XLM/EUR pair until the summary, where the relevant resistance and support areas will be shown in dollars and euros.
On Apr 26, the price reached a low of $0.094. An uptrend ensued and several higher lows have been reached since.
Tracing these lows gives us an ascending support line:
On Apr 25, the price reached a high of $0.107. Several market cycles have been completed and the price has reached higher highs each time.
Tracing these highs gives us an ascending resistance line. The resistance and support lines combine to create an ascending channel.
The price broke down from the channel on May 6. In order to test the validity of the breakdown, we need to take a look at technical indicators.
In this section, we analyze the price of XLM/USD alongside volume. It is traced in the graph below:
On May 6, the price broke down from the ascending channel. The breakdown occurred on average volume.
The use of this indicator makes it likely that the price of XLM will increase and possibly move back within the confines of the channel.
If it begins to increase, where will it find resistance?
To determine the actual possible future price levels, we incorporate resistance areas into the analysis.
Resistance areas are created when the price visits the same level several times. If a breakdown occurs, they can create possible areas of reversal.
These are shown in the graph below for both XLM/USD and XLM/EUR:
The closest resistance area for Stellar lumens is found near $0.101 and €0.086. If the price begins to increase, it is likely to provide resistance.
Summary of Analysis
Based on this analysis, the price of Stellar lumens is likely to increase towards the resistance area we have outlined above. The price might soon bounce back from its recent drops and reach levels over $0.10 and €0.085.
Do you think the price of XLM will begin to increase? Let us know in the comments.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.