On Apr 16 2019, the price of Stellar Lumens reached a low of $0.109 and €0.097. A gradual increase ensued and the price reached a high of $0.12 and €0.106 on Apr 18. It has been gradually decreasing since.
Will the price of Stellar lumens continue to decrease or should we expect a reversal soon?
Let’s find out:
Stellar Lumens (XLM): Highlights for April 22, 2019
- The price of Stellar lumens has been on a downtrend since Apr 18.
- XLM has been trading inside a horizontal channel.
- There is bullish divergence developing in the RSI.
- There is resistance near $0.125 and €0.11.
Current Trading Pattern for Stellar Lumens
On Apr 11, the price reached a low of $0.109. A gradual increase was followed by a decrease. The price reached the same level several times.
Tracing these lows gives us a horizontal support line:
On Apr 15, the price reached a high of $0.120. Several market cycles have been completed since and the price has reached the same level again.
Tracing these highs gives us a horizontal resistance line.
The support and resistance lines combine to create a horizontal channel:
It is likely that the price will keep trading inside the confines of this channel until a decisive move occurs. In order to predict the direction of the move, we need to take a look at some technical 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.
The price made a low of $0.109 on Apr 21. It reached a similar level on Apr 21.
Similarly, the RSI made the first low on Apr 21. However, it has continued to generate higher values since.
This is known as bullish divergence and often precedes price increases.
The use of these indicators suggests that the price will increase towards the resistance line of the channel.
To determine the actual possible future price levels, we incorporate resistance areas into the analysis.
The closest resistance area is found near $0.125 and €0.1. If these levels are to be reached, Stellar lumens must break out of the current trading pattern.
While this is possible, we are predicting price movements toward the resistance line without a breakout as more likely in the shorter-term. It is possible that upon reaching the resistance line, Stellar lumens will drop back toward the support line and not breakout.
Summary of Analysis
Based on this analysis, the price of Stellar lumens is likely to keep trading inside the confines of the horizontal channel. We believe that the price of XLM/USD and XLM/EUR will increase in the short term. It is likely that prices will near the resistance line of the current trading pattern.
If the resistance line is reached, both a breakout or reversal appear possible.
Do you think the price of XLM will break out from the channel? Let us know in the comments.
If you’re interested in Stellar lumens price predictions for 2019 and 2020, click on the green 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.