The central theses
- Stellar is pegged for 45.50% rebound after breaking out of a descending triangle.
- The parabolic SAR, MACD and SuperTrend indicators confirm the optimistic outlook.
- Just a 4-hour candlestick below $ 0.230 compromises the bullish thesis described above.
Share this article
Stellar’s market outlook appears to be improving after a three-week period of consolidation.
Stellar breaks out
Stellar Lumens (XLM), the eleventh largest cryptocurrency by market cap, appears to be breaking out of a descending triangle that has been developing on its 4-hour chart since Jan. 7.
Since then, the price of XLM has hit a number of lower highs. Meanwhile, the $ 0.230 support level could prevent the price of the coin from falling any further.
A recent surge in buying pressure behind Stellar has been significant enough to push the price of the coin through the triangle’s hypotenuse at $ 0.253. After XLM regained this price hurdle as support, the chances of a 45.50% rebound have increased to $ 0.376.
Stop and turn back
The parabolic stop and reverse (“SAR”) gives credibility to the bullish outlook. This trend following indicator predicts the end of Stellar’s consolidation phase.
Any time the stop and reversal points drop below the price of an asset, that event is considered a positive sign. Hence, the recent envelope suggests that XLM is poised to move forward.
The moving average convergence divergence (MACD) also became bullish after the golden cross between the 12 hour exponential moving average and the 26 hour exponential moving average. Meanwhile, the SuperTrend indicator flashed a “long” signal as Stellar cut the $ 0.253 resistance.
All of these technical indexes help validate the price projection of the descending triangle for XLM.
Regardless, investors need to remain cautious as the cryptocurrency market continues to be at risk painful correction.
A downturn below the USD 0.230 support level could invalidate the bullish thesis. This could cause the SAR and SuperTrend parabolic indicator to turn bearish and XLM to fall towards $ 0.123.
Disclosure: At the time of writing, this author owned Bitcoin and Ethereum.
Stellar invests in the DeFi Stock Exchange DSTOQ
The Stellar Development Foundation has announced a $ 715,000 investment in DSTOQ, a Stellar-based FinTech project that allows users to invest in traditional stocks using fiat and cryptocurrency. Stellar revealed the …
What is stellar? Introduction to XLM
Stellar is a cryptocurrency that conducts financial transactions over a peer-to-peer network. With its Lumen token, it should compete with other infrastructure platforms for fast settlements such as Ripple. Indeed,…
Introduction to the Crypto Briefing 10 (CB10) Index
The Crypto Briefing 10 (CB10) index is a portfolio of ten cryptocurrencies by market capitalization (MCAP), distributed according to a weighted average. Readers are also assumed to be American, and tokens excluded …
Review of forecasts for 2020 and 2021
Happy New Year from all of us at Crypto.com Research! 2020 was an unprecedented year for the world and for crypto. Before we get fully into the predictions for 2021, we will …