XLM is having a tough time finding buyers. Bulls tried keeping Stellar’s native cryptocurrency token afloat above the $0.37 support. But alas, bears took over, and the said support level has now flipped into a critical resistance level. What’s next for the XLM/USD trading pair?
XLM/USD Dips Below 200-Day SMA, Recovery Looks Bleak
The news of Stellar blockchain-based Leaf Wallet receiving equity-free investment from the UNICEF CryptoFund could have salvaged XLM’s bearish stance. But it didn’t. On June 4, bears significantly offloaded their holdings after few days of recovery rally. The resultant red candle pushed prices to the critical $0.37 support marked by the 200-day simple moving average(SMA) line.
Bulls tried attempting a recovery 2 days later on June 6 but failed when bearish momentum took over gain pushing prices below the aforementioned support. As a result, the $0.37 price level has now turned into a critical resistance level for bulls. Which as per the current scenario of overpowering selling pressure looks insurmountable.
If the bearish price action continues (like it has for the past few days), the Stellar coin could dip further and test the next support level near the $0.28 price level (300-day SMA). Corrections beyond the same will unleash pure mayhem.
What Options Do Bulls Have?
As mentioned earlier, bulls have to work in unison to negate the selling pressure and push XLM prices to the $0.37 resistance and flip it back into resistance. This looks possible since bears are losing steam, and selling pressure is dying out.
The diminishing negative area under the MACD (Moving Average Convergence Divergence) indicator confirms this. A bullish crossover could follow on account of renewed buying activity which could signal more bulls to join the race.
If buying pressure sustains after converting $0.37 back to support, bulls could aim for the next resistance level near the $0.44 price mark, which was lost after the selloff resumed on June 4.
If buying action pushes Stellar’s cryptocurrency token past the $0.44 then a retest of the “50-cent” price level will become quite possible.