At BeInCrypto, we publish regular price analyses and predictions for various cryptoassets. In our Apr 30 analysis of Stellar lumens (XLM), we predicted the price would increase. Our prediction was validated later that day when the price reached the resistance area we have defined below. To learn more, read our latest XLM/USD($) and XLM/EUR(€) analysis below:
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.
How long will the increase continue?
Let’s find out:
Stellar Lumens (XLM): Highlights for May 2, 2019
- The price of Stellar lumens has been on an uptrend since Apr 26.
- It is trading inside an ascending triangle.
- There is bullish divergence developing in the RSI and the MACD.
- There is resistance near $0.11 and €0.092.
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 2 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 several higher lows 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 the same level three times.
Tracing these lows highs gives us a horizontal resistance line. The support and resistance lines combine to create an ascending triangle:
It is likely that the price will trade inside the confines of this triangle until a decisive move occurs.
In order to predict the direction of the move for Stellar lumens, we need to take a look at some technical indicators.
In this section, we analyze the price of XLM/USD alongside the RSI and the MACD
The relative strength index (RSI) is an indicator which calculates the size of the changes in price in order to determine oversold or overbought conditions in the market.
The moving average convergence divergence (MACD) is a trend indicator that shows the relationship between two moving averages (long and short-term) and the price. It is used to measure the strength of a move.
They are both traced in the graph below:
On May 1, the price reached a high of $0.107. It reached the same level on May 2.
Similarly, the RSI and the MACD made the first high on May 1. However, they have continued to generate lower values since.
This is known as bearish divergence and often precedes price decreases.
These indicators suggest that the price will decrease towards the support line of the triangle.
However, because of creation of a bullish pattern and prior price movement, we believe that this is a short-term decrease before an eventual decisive upward move.
If the move occurs, where will price 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 $0.11 and €0.092. If the price breaks out from the triangle,it is likely to reach this area. We believe this is likely, but not before a drop towards the support line of the triangle.
Summary of Analysis
Based on this analysis, the price of Stellar lumens is likely to break out from the triangle and reach the resistance area outlined above. However, a drop towards support is expected prior to the breakout.
Do you think the price of XLM will break out from the triangle? Let us know in the comments.
If you’re interested in Stellar lumens price predictions for 2019 and 2020, click on the blue button below:
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.