New Delhi (CoinChapter.com) — Stellar Lumens prices have been going through the token’s longest losing streak in 2021. The project’s native token XLM dropped by 9.2% on Monday as the entire crypto market declined in tandem.
Stellar’s XLM has had a volatile run this year. The token underwent downside corrections of more than 50% in the last six months, even as it kept rising to claim a new high in subsequent weeks. However, this is the first time XLM’s decline has gone almost unchecked.
XLM’s lackluster price chart
Stellar has fallen by 67.9% from its year-to-date high of $0.8048 to Monday’s low of $0.2580. The token’s chequered trading history kindles hopes of another revival. However, it may be some time before an upward rally begins. The chart below shows why.
The 50-Day Moving Average (Green) line broken below the 100-Day Moving Average (Blue) Line on June 20. The level maintained XLM’s short-term bullish bas across across 2020 and during the Q1/2020. Meanwhile, the Stellar token also dropped below the 200-Day MA on June 7, further heightening its medium-term bearish risks.
The token is currently testing May 23’s low of $0.273. XLM has already crossed below the 61.8% Fibonacci level ($0.35) and is now inching towards the 78.6% retracement level ($0.226). For the uninitiated, Fibonacci Retracement levels are lines that indicate where support and resistance will likely occur.
The 78.6% Fib level of $0.2269 is a critical support for XLM. If the bears manage to break past this support level, XLMUSD may decline further towards the next support at $0.1181, putting into the ground all the gains of 2021. Breaching the critical support level may also induce investors to panic sell, leading to further liquidation and falling prices.
Stellar prices have failed to go above the 10-Day EMA as well, suggesting the short-term trend is favoring bears as well. Furthermore, the Relative Strength Index, an indicator of price momentum, has reached 30.19, its lowest point in 2021. The score indicates that XLM is in an oversold condition.
Presently, there is no forecast of a trend reversal on the horizon, with most technical indicators advising a sell position for the Stellar token. If the bulls start buying the dip, it may bolster prices and arrest XLM’s fall at the next support level. However, it seems bears are in command for now.
What Lies Ahead
Stellar Lumens is an open-sourced, decentralized protocol for money transfer. Although the blockchain-based firm has had several wins this year, an absence from the newsreels has not helped its cause.
The blockchain upgraded to Protocol 17, which helps businesses safeguard themselves from fraudulent activities. The funding of a Stellar-backed wallet into the UNICEF’s Innovation Fund was another highlight for XLM. Stellar aims to make the financial world more open to individuals and businesses.
Despite the present bearish scenario, Stellar is still up by 111.05% YTD. Though for now, XLM is on the way to test its next support level. At the time of writing, the token was trading at $0.25356.