Stellar Lumens and the Big Burn
On November 4, Stellar Lumens made waves by announcing a 50% reduction in their total token supply, resulting in the obliteration of 55 billion XLM tokens. The Stellar Development Foundation proclaimed this bold move was intended to boost efficiency within the Stellar ecosystem. Think of it as a strict diet plan for cryptocurrency—less fluff, more substance!
XLM Goes Bullish: I Smell a Surge
After this announcement, the price of XLM took a glorious leap of 25%. This price spike ignited a bullish outbreak in the market, making many altcoin aficionados do a victory dance. With a plethora of altcoins starting to post impressive returns, it’s time to put XLM under the microscope for a thorough examination.
A Tale of Retraces
XLM has had quite the roller coaster ride. From its high of $1.10 in December 2017 to a low of $0.05 in May 2017, the weekly timeframe shows a full retrace. But hold your horses! That current price level has been holding as support, hinting that it may serve as a trampoline for further upward movements.
However, caution is advised: XLM has been in a downtrend for 23 months ever since its peak. To shake things up, it needs to break that prolonged downtrend, creating higher highs and higher lows. Sounds easy, right? Well, the crypto world has a way of keeping us on our toes!
Volume Up: All-Time Highs and Resistance Levels
As XLM skyrocketed, it also set an all-time high trading volume on Bitfinex. The trading price breezed past an important resistance level of $0.07, pushing higher into the $0.09 range. Now, for this rally to have some staying power, a retest around $0.073 is crucial to confirm that support-resistance flip.
- Resistance: $0.09
- Key support levels: $0.07, $0.073
Recognizing Historical Patterns
Interestingly, similar patterns have emerged during previous XLM bottoms. The price behavior on the XLM/BTC pair has echoed the same price action, revealing that past trends often dictate future movements. Interestingly, during the 2017 hype, when major trades occurred, price spikes were frequent; however, they were usually followed by sharp retraces.
The current bullish divergences on higher timeframes are reminiscent of those previous cycles. If history repeats itself, XLM might be gearing up for another astronomical climb. A 2,200% price increase after previous bullish patterns? Yeah, a little crazy, but also totally possible in the crypto world.
What Lies Ahead: Range Highs and Resilience Tests
As we look at the smaller time frames, XLM’s movements create a clear picture: a trading range with resistance sitting around 900 sats and a bullish structure from recent higher lows established since September. However, without clearing the upper resistance, a sustained breakout may be stifled.
If support maintains around the 810-820 sats area, upward momentum could lead XLM towards potential resistances at 1230-1250 and 1500-1550 sats. But drop below these levels and it may revisit the rocky shores of 700 sats. With these fluctuations, it’s as if XLM is navigating a choppy sea!
Ripple (XRP) Watching Events Unfold
Traders, keep an eye on Ripple (XRP) along with XLM—as they often dance the same tango. As XLM shows signs of a bottom, XRP might soon start moving in sync as well. With the Swell conference looming, which could bring some juicy news and turbulence to the market, XRP’s movements at $0.305 could either lead it to a breakout towards $0.36 or lead to further head-scratching.
As always, remember that every investment carries its own set of risks. Better to do your homework than to coin flip your hard-earned dollars away!
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