After seeing a significant bullish push, Stellar Lumens (XLM) has seen a small -5.34 price decrease over the past 24 hours of trading. The Stellar token is currently exchanging hands at a price around $0.2391 after seeing a 17.34% increase in price over the past 7 trading days.
What is Stellar?
Launched in 2014 after Jeb McCaleb forked Stellar from the Ripple protocol, Stellar Lumens is dedicated for the people. It enables low-cost interbank transactions across borders in less than 5 seconds, an extraordinary feat in the world of payments.
Stellar has the vision to expand financial access worldwide by enabling access to finance for the unbanked. The Stellar platform connects individuals, institutions and payment systems.
What’s new with Stellar?
Currently Stellar can process around 1000 transaction per second. This is significantly higher than Bitcoin (7 transactions) and Ethereum (25 transactions) in terms of transactions per second.
Stellar has recently announced a merger with Chain to create Interstellar allowing Stellar to penetrate into the world of finance.
Stellar is also looking into launching a decentralised exchange as well as increasing their partnership base. Coinbase had recently announced that they were looking to add XLM to their platform causing price action to explode by over 15% on the announcement in July 2018.
Where is Stellar currently ranked?
Stellar is currently ranked in 6th position in terms of overall market cap across the entire industry. It has a total market cap value of $4.49 billion after the XLM market sees a price increase totalling 21.99% over the past 90 trading days. The 50-month-old coin is still trading at a price that is 71.92% lower than its all time high price.
Let us continue to analyse price action for Stellar over the long term.
XLM/USD – LONG TERM – DAILY CHART
The epic bull run
Analysing price action from the long term perspective above, we can see that the XLM market had experienced a significant bullish run toward the end of 2017 when price action started from a low of $0.08233 on December 8, 2018, and extended to an all time high of $0.982391. This was a price increase totalling 1150% from low to high.
What happened after?
We can see that after going on this incredible bullish streak and placing the all time price high, the market rolled over and began to decline rapidly. It had initially found support at the .618 Fibonacci Retracement level priced at $0.3911 in January 2018. This Fibonacci Retracement is measure from the entire bullish run outlined above.
We can see that the market continued to decline until hitting a yearly low at the .886 Fibonacci Retracement level priced at $0.1752 in March 2018. We can see that price action has not since broken below this level of support.
What about this triangle?
As the Lumens market has consolidated from the previous bullish trend it has formed a long term technical pattern known as a symmetrical triangle. The triangle is characterized by an upward sloping support line and a downward sloping resistance line. We can see that any time price action approached the upper boundary of the triangle the market was rejected and reversed. Similarly, each time the market approached the lower boundary, price action was rejected heavily and rebounded.
We can see that price action in the XLM/USD market is approaching the apex of the triangle where a breakout is expected toward the upside or the downside.
Let us continue to analyse price action a little closer of the short term and highlight any potential support and resistance areas.
XLM/USD – SHORT TERM – DAILY CHART
What’s been going?
Analysing the market from a shorter time horizon, we can see that XLM had experienced a smaller bullish run during July when price action started from a low of $0.16 on June 29, 2018, and extended to a high of $0.36 on July 25 2018. This was a price increase totalling 178% from low to high.
We can see that after placing this high, price action had rolled over and reversed. It continued to fall during August 2018 until it found support at the short term .886 Fibonacci Retracement level priced at $0.1963. We can see that price action has not yet since penetrated below this support level.
Where are we now?
Over the past trading week, price action has risen substantially. We can see that on September 21 2018, price action spiked higher with an increase in volume. The market rallied until finding resistance at the upper boundary of the long term triangle before rolling over and reversing.
Price action is now trading at the support provided by the 100 day moving average, currently priced around $0.23.
Where can we go from here?
If the bulls can regather momentum and push price action higher, we expect immediate significant resistance to be located at the short term .5 Fibonacci Retracement level priced at $0.2648. Resistance above this level will then be expected at the upper boundary of the long term triangle. Price action has not yet managed to break up above this triangle for the entire year and will require significant momentum to do so.
If the bulls can penetrate above the triangle, further resistance above can be expected at the .382 Fibonacci Retracement level priced at $0.2875 followed by July 2018’s price high at $0.3617.
What if the bears regain control?
If the bears regain control of the momentum within the market and push price action lower, we can expect immediate support to be located at the .786 Fibonacci Retracement level priced at $0.2098.
Further support located below this can then be expected at the .886 Fibonacci Retracement level priced at $0.1906. This area of support will require significant momentum to break below due to it being bolstered by the lower boundary of the long term triangle.
What do the technical indicators read?
At this moment in time, the technical indicators lean toward favouring the bulls. The RSI is trading well above the 50 handle indicating that the bulls are in possession of the momentum within the market. So long as the RSI can remain above the 50 handle we can expect the bulls to make further gains.