2019 wasn’t very kind to Stellar, and its holders, as the once-promising cryptocurrency was sliding down the ranks, losing in both capitalization and market value. In the said period, XML got devalued by 66% in USD, and was defeated in the race for gains by both Bitcoin (-74%) and Ethereum (-60%).
Fundamentally, Stellar also hasn’t made much progress - for instance, the company’s long-term partner Nodle, which offers a blockchain solution for IoT, announced that they are going to leave the Stellar ecosystem and migrate to the proprietary blockchain.
Nevertheless, traders still show a lot of interest in this coin since its average trading volume across all exchange platforms has been kept in a tight range between $381 million and $428 million during the last three months, which still makes XLM a relatively comfortable coin for trading, especially for shorting virtuosos.
After the cryptocurrency market crashed, a lot of coins have had an immediate bullish reaction that resulted in a green candle closing above the previous collapsing red one. But in the case of Stellar, there has been a period of indecisiveness that lasted for two weeks, with the price failing to close above the preceding “sell-off” level.
1-week XML/USDT chart
However, that reluctance to push the price higher immediately after the crash resulted in the formation of the double doji, which is widely considered as a sign of hesitancy with the expectation for a bullish breakout when it emerges at the bottom of the downward move. This week’s candle should serve as a confirmation of the upcoming bullish move, especially if it manages to close above the upper wicks of the previous candles or $0.044.
The absence of a lower shadow on the current candle also indicates that the bulls might be seizing the initiative for the time being - plus, we see a decent buying volume during the last two weeks. In the present circumstances, however, this pattern shouldn’t constitute a sure signal to go long - like any other signal for that matter - but traders must keep a close eye on the further developments on that time frame.
1-day XML/USDT chart
On the daily time frame, XML is approaching the edge of the ascending wedge formation, which signals about the imminent breakout, most probably in the direction of the 50-period EMA that would be running at approximately $0.047 - $0.05, and act as a resistance. MACD is also in support of the upside move as it has already laid the course to a zero borderline.
But traders should also be aware of the fact that the price is still mainly in the bearish zone, whereas the bulls’ efforts to break the resistance at $0.044 were to no avail, despite the substantial buying volume during the entire week. If that level is not being broken in the next few days, traders who bought at $0.037 or $0.039 could grow tired of waiting and begin to exit their positions for a minimal profit that would ultimately result in a 10% to 13% price drop, thus throwing the price to the previous support at $0.036. Therefore, the name of the game right now is to put stop-losses strategically and watch out for the wedge breakout.
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