Stellar Lumens Follows a Bullish Bitcoin to New Highs (XLM/USD Price Prediction for 04.03.2019)

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At BeInCrypto, we publish regular price analyses and predictions for various cryptoassets. In our Mar 28 analysis of Stellar lumens (XLM), we assessed that XLM was within the handle portion of a reverse cup and handle pattern. Based on this, we suggested possible price increases. However, a market-wide spike in early Apr invalidated our prediction. Lumens have since skyrocketed to highs above $0.13. To learn more, keep reading below.

On March 4, 2019, the price of Stellar lumens reached a low of $0.080. It has been on a gradual uptrend since.

Price increases accelerated on Apr 2. At the time of writing on Apr 3, XLM/USD had reached a daily high of $0.131.

Will prices keep going up or are lumens about to face a tragic correction?

XLM Prices: Mar 1- Apr 3

Stellar Lumens (XLM): Highlights and Trends For April 3, 2019

  • The price of Stellar lumens has been on an uptrend since Mar 4.
  • XLM is trading inside an ascending channel.
  • There is bearish divergence developing in the RSI.
  • There is support near $0.12.

Ascending Channel

In this section, we analyze the price of XLM/USD at six-hour intervals from Mar 1 to Apr 4 to trace the current trading pattern.

On Mar 4, the price made a low of $0.080. A rapid increase ensued, followed by a gradual decrease. The price made several lower lows.

Tracing these lows gives us an ascending support line:

On Mar 11, the price made a high of $0.111.  Several market cycles have been completed since, with each high being higher than the previous one.

Tracing these highs gives us an ascending resistance line.

The resistance and support lines combine to create an ascending channel:

Stellar lumens have seen steady increases within this channel since Mar 4. The recent spikes brought XLM to the resistance line. However, at the time of writing, lumens had not broken out of the channel.

Furthermore, the high to touch the resistance was a wick high. Compared to the opening and closing values during this period, XLM may still see movement toward the resistance before an eventual reversal toward support.

Bearish Divergence

In order to better assess future price fluctuations, we incorporate technical indicators into our analysis.

About the Indicators:  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.
RSI is traced in the graph below:

On Apr 2, the price reached a high of $0.126. It made a higher high of $0.131 on Apr 3.

Similarly, the RSI made the first high on Apr 2. However, it has continued to create lower values since.

This is known as bearish divergence and often precedes price decreases.

The use of RSI further suggests price losses toward the support line in the near future.

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Future Movement

To better determine possible price levels in the future, we will examine resistance and support areas.

About Resistance and Support Areas: Resistance and support areas are formed when the price reaches a certain level several times. They can act as a ceiling/floor that prevents the price from moving further in that direction.
These are traced on the graph below:

The closest support area is found near $0.12. It is formed by the highs of Feb 19. If price drops toward support as predicted, Stellar lumens may reach this support and possibly drop further.

Summary of Analysis

Based on this analysis, the price of XLM is likely to decrease in the near future, and reach the support line of the channel. It is possible that lumens will reach $0.12 and continue dropping. However, we do not currently believe that a breakdown is forthcoming.

Furthermore, while a breakout is possible, we believe this also to be unlikely.

Do you think the price of XLM will keep trading inside the channel? 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.

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Valdrin is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo. In 2019, he decided to focus full-time on cryptocurrencies and trading.

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