The last time I looked into Stellar, XLM, the altcoin was trading at around $0.09, when it surpassed both the 20-day and 50-day EMA.
Over the last 24 hours, it lost around 2%, and XLM is sitting south of $0.06.
Overall, the cryptocurrency lost 43% from its peak, touching for a brief moment $0.507, recovering during October to a high of $0.064.
Will Stellar Lumens recover and surpass its yearly all-time-highs? Or will XLM continue the short-term trend to the downside?
Let’s take a look at the charts.
Since late September, Stellar Lumens has been recovering and already gained above 15%.
However, at the time of writing, XLM has been underperforming most other coins in the cryptocurrency market.
Looking into the volume profile, it seems the price has been pushing higher and breaking some important levels. The next resistance point should be between $0.06 and $0.063. Afterwards, much like it did during the last peak, the next resistance levels should be between $0.08 and $0.084.
Another important indicator is the death-cross, confirmed in late July, when the 20-day EMA crossed both the 50-day and 200-day EMAs to the downside.
Even though price has been in a positive trend over the last few weeks, traders and investors shouldn’t forget XLM is still in a bearish momentum. Until the price is able to break and maintain its support levels above the 20-day EMA, I wouldn’t get too hopeful.
Clearly, there’s room for additional losses towards $0.05 and lower, even though I don’t see a high probability of this happening.
What I expect to happen is the price of Bitcoin to rise during November, which could also change the mood of investors towards altcoins. If that is the case, then I see XLM breaking past the insane resistance levels around $0.09 and going for $0.010 and $0.012.
For now, enjoy the buying opportunity; just don’t forget price can be quite moody.
Latest Stellar news
Hey #StellarDevelopers, Horizon v0.22.0 has been released, which supports Protocol 12. This gives everyone ample time to prepare for the Protocol 12 upgrade vote on October 28.
More info: https://t.co/CpnrhCCu9N
— Stellar (@StellarOrg) October 10, 2019
There has been some movement within the Stellar community during the recent past, as the new protocol update 12 approaches.
The most recent version of the protocol will incorporate important upgrades to make the network more robust. It includes a somewhat controversial proposal: to terminate inflation.
This would mean fewer XLM would be minted and distributed to the current Stellar Lumens holders.
There are two main reasons why the Stellar foundation is proposing the change, which I detail below:
- Inflation isn’t benefiting projects building on Stellar, as most users simply join pools to receive and hold the newly minted XLM, without giving it away to projects for example.
- Inflation will lead to scalability issues in the future, as the greater the network is, the more drag inflation pools will have on the network, making it effectively slower.
If Stellar is able to stop inflation, a move that I believe the community does support, we could see the price of the token starting to rise in accordance with an increase in stock-to-flow ratio.
About Stellar Lumens
Stellar was founded in 2014 by Jed McCaleb and Joyce Kim. At launch, it was based on the Ripple protocol, but the network eventually forked. Stellar is an open source protocol for exchanging money where servers use the internet to connect to and communicate with other Stellar servers, forming a global value exchange network.
Stellar Lumens is one of the largest cryptocurrencies and is one of the top 10 cryptocurrencies by market capitalisation.
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