XLM - To go or not to go for a trend reversal?
Updated
XLM has great fundamentals, but just as with the overall crypto market, price has been in a downward spiral since beginning of January. In this post, I want to have a look at the overall picture, and identify some support and break-out levels / signals, looking at the three charts: 1) versus Bitcoin, 2) ETH, and 3) USD.
1. The XLMUSD graph:
1) The CCI is curving upward again (see area under the chart), if you look at the previous times that this happened, we also saw a considerable increase in the chart.
2) MACD is trying to get that bullish cross going for it. We want to see it curve upward as well to get us some momentum.
3) Volume is low as f***. We also need it to spike in the green.
4) Looking at the overall chart, we see two yellow resistances, of which the first one resulted in a downward trend channel between the two yellow lines. We are now breaking out of that channel, and thereby also of the triangle with basis the 38,2% Fibonacci retracement line. We are seeing a green candle there. But this cannot yet be considered a real triangle break-out, given that we lack volume etc.
--> Conclusion: still lacking some momentum here, but at least we have a strong support at the Fibonacci 38,2%, an upward bending CCI, and a first green candle trying to break through that negative trend channel.
2. The XLMETH graph:
1) CCI curving upward as well.
2) MACD struggling with that bullish cross as well.
3) Low green volume.
4) Strong support levels as well, see the two white horizontal lines. Note that the highest one of the two is now acting as a resistance + we have a break-out of the triangle formation there, albeit low volume and we still have to break through that white horizontal resistance.
5) We have a Heikin Ashi reversal candle (a doji) just before that last green candle, in theory this is typical for a trend reversal.
Support at 0,00035712ETH. Resistance at 0,00041922; 0,00046830.
3. The XLMBTC graph:
1) CCI trending upward.
2) MACD heading right into that golden cross, but still in downward momentum.
3) Again, incredibly low volume.
4) We’ve been in a downtrend against that yellow resistance line, quite clearly. No room to get through until now: a first nice green candle there, with a high against the next Fibonacci level (61,8%; 3259 satoshi) as current resistance level. Support at +-2872 satoshi.
5) Also have a look at how nicely the Fibonacci speed resistance lines (the white fan) shows our support and resistance channels. For example: we hit the 25% line at the bottom in the previous candle.
Other remarks:
--> Note that in each graph, we are at the very low end of the Bollinger bands.
--> Chaikin Money Flow indicator is shown in the main graph of this post, and could be applied to verify accumulation momentum. This is turning positive now. You should typically place bullish/bearish indicator threshold here but that would overcomplicate things. It’s just good to see it curving up a bit.
Conclusion:
While this could be a bottom with relatively strong support levels and a first bump upward in the right direction, we are still lacking volume – even though we already hit some a first green candle or so breaking the downward trend channels. Hence, we are still not in the clear. So keep an eye out on volume and momentum strengthening – it’s what we need!
Note: this post’s intention is mostly to give you a framework on how to evaluate further price movement of XLM. As such its intention is informative, and definitely not to be considered as investment advice.
1. The XLMUSD graph:
1) The CCI is curving upward again (see area under the chart), if you look at the previous times that this happened, we also saw a considerable increase in the chart.
2) MACD is trying to get that bullish cross going for it. We want to see it curve upward as well to get us some momentum.
3) Volume is low as f***. We also need it to spike in the green.
4) Looking at the overall chart, we see two yellow resistances, of which the first one resulted in a downward trend channel between the two yellow lines. We are now breaking out of that channel, and thereby also of the triangle with basis the 38,2% Fibonacci retracement line. We are seeing a green candle there. But this cannot yet be considered a real triangle break-out, given that we lack volume etc.
--> Conclusion: still lacking some momentum here, but at least we have a strong support at the Fibonacci 38,2%, an upward bending CCI, and a first green candle trying to break through that negative trend channel.
2. The XLMETH graph:
1) CCI curving upward as well.
2) MACD struggling with that bullish cross as well.
3) Low green volume.
4) Strong support levels as well, see the two white horizontal lines. Note that the highest one of the two is now acting as a resistance + we have a break-out of the triangle formation there, albeit low volume and we still have to break through that white horizontal resistance.
5) We have a Heikin Ashi reversal candle (a doji) just before that last green candle, in theory this is typical for a trend reversal.
Support at 0,00035712ETH. Resistance at 0,00041922; 0,00046830.
3. The XLMBTC graph:
1) CCI trending upward.
2) MACD heading right into that golden cross, but still in downward momentum.
3) Again, incredibly low volume.
4) We’ve been in a downtrend against that yellow resistance line, quite clearly. No room to get through until now: a first nice green candle there, with a high against the next Fibonacci level (61,8%; 3259 satoshi) as current resistance level. Support at +-2872 satoshi.
5) Also have a look at how nicely the Fibonacci speed resistance lines (the white fan) shows our support and resistance channels. For example: we hit the 25% line at the bottom in the previous candle.
Other remarks:
--> Note that in each graph, we are at the very low end of the Bollinger bands.
--> Chaikin Money Flow indicator is shown in the main graph of this post, and could be applied to verify accumulation momentum. This is turning positive now. You should typically place bullish/bearish indicator threshold here but that would overcomplicate things. It’s just good to see it curving up a bit.
Conclusion:
While this could be a bottom with relatively strong support levels and a first bump upward in the right direction, we are still lacking volume – even though we already hit some a first green candle or so breaking the downward trend channels. Hence, we are still not in the clear. So keep an eye out on volume and momentum strengthening – it’s what we need!
Note: this post’s intention is mostly to give you a framework on how to evaluate further price movement of XLM. As such its intention is informative, and definitely not to be considered as investment advice.
Note
Keeps on trading between the Fibonacci speed resistance line at 0.25 and the overall 50% retracement level :) No volume whatsoever, could be in a cup & handle formation similar as to ICX/BTC?XLMBTC:
ICXBTC:
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