Stellar is an open-source, decentralized protocol that allows cross-border transactions, but it has crossed the previous yearly low after the FTX liquidity crisis. At the time of writing this post, XLM was trading around $0.089, just above the yearly low of $0.08.
Before the FTX bankruptcy announcement, Stellar had been consolidating between $0.1 and $0.15 in the last six months. Now it is trying to regain the previous support of $0.1 from last week, but the previous support level might work as a strong resistance for XLM, and it might consolidate within a range of $0.08 and $0.1. When will XLM surpass the resistance? Click here to know!
On the daily chart, most technical indicators are bearish, and candlesticks are in the lower Bollinger Bands, which suggests extreme bearishness for the short term. It is not an ideal time to invest until XLM forms a strong support of around $0.8 or below.
The weekly chart of Stellar is extremely bearish because candlesticks have been forming in the lower Bollinger Bands for the last year. Moreover, In the last two weeks, it has broken the lower BB, and this week’s candle is forming below the lower BB, which suggests extremely negative sentiment in the market for the long term.
All other technical indicators are bearish, so we can assume a huge selling pressure, especially after the FTX liquidity crisis, because investors do not treat XLM as a safer asset for the long term. XLM may find short-term bullishness or a consolidation up to $0.1 or $0.15 in the next three weeks. However, you should avoid such risky investment decisions because XLM is in a long-term downward, and it does not form any support on the weekly chart.
The only positive sign is that MACD is still bullish with green histograms, which is a lagging indicator, so it will turn bearish within a few weeks. On the lower side, XLM could test a level as low as $0.03.
If you are interested in investing in cryptocurrencies for the long term, you should find less risky digital assets like Bitcoin and Ethereum because they are still in a better position than mid and small-caps.
However, the SEC is investigating the FTX liquidity crunch, and Binance has announced a recovery fund; still, we think the crypto market will be volatile in the next few weeks, and the XLM price may test a lower level.