TechnicalAnalysis Archives

Stellar (XLM) has seen a stunning turnaround after the recent market downturn. However, following the announcement of the CPI report and corresponding fears of an interest rate hike, a sell-off ensued.

The Donchian channel indicates that the average price of XLM is $0.1076 as of this writing. After a drop, the Awesome Indicator also gives off very strong bullish signs.

This could signal a rebound. The XLM market has showed a spectacular recovery from the September 13 catastrophe, with prices climbing back above the $0.1004 support line that sustained the downturn from August 14 to September 6.

At the 4-hour time mark, the coin is following an uptrend. Looking at the wider picture, however, we see that the upturn may be short-lived.

Stellar Rally Gives Investors Some Confidence

The XLM token closely tracks Bitcoin’s price movements because the whole cryptocurrency market is modeled after it. The downward pressure of the triangle indicates that the coin’s motion is heading in a downward direction.

Price levels of support and resistance were calculated using the Fibonacci retracement tool. The bulls are attempting to leverage two supports located at $0.1023 and $0.1058.

These two factors have bolstered traders’ and investors’ optimism, which has contributed to the price increase.

The range of $0.1153 represents the resistance level. If price momentum overcomes this resistance, the price might rise to the $0.1234 region. This can be a strong purchase signal for investors and traders.

Indicator of momentum also demonstrates bullishness. In addition to purchase signals, moving averages are currently sending buy signals. For the market to rebound, however, bulls must have sustained momentum in order to surpass the $0.1194 and $0.1234 resistance levels.

Looming Interest Rate Hike To Determine XLM Price

Even for the broader cryptocurrency market, this can be a challenging issue. As previously indicated, XLM and other cryptocurrencies on the market share a strong correlation with Bitcoin which, in contrast, tracks the S&P 500 Index.

In light of this, XLM’s mini-rally could be imperiled if larger financial markets continue to fear an impending interest rate hike. The XLM price is already struggling to surpass the $0.1153 barrier level.

From the 10th until the 13th of September, the coin has already tested the specified resistance level. The coin is trading close to the resistance level of $0.1153 at the time of writing.

The presence of long candles on the charts may signal another attempt to break out of a trading range. If the price falls again, it should not breach the $0.1023 support level, since doing so could spark a bigger sell-off.

XLM total market cap at $2.8 billion on the daily chart | Source: TradingView.com

Featured image from Zipmex, Chart: TradingView.com

(The analysis represents the author’s personal views and should not be construed as investment advice).

Cardano faces a new obstacle with the impending Vasil update. Analyst and futures trader Peter Brandt predicts poor performance for the coin based on current trends and projections.

He recently tweeted on the present state of affairs for Cardano.

“This is a fractal chart pattern called a descending triangle. If the construction continues in the fractal, $ADA should have one more significant retreat.”

The keywords are “should,” and not “must,” Brandt tweeted.

The analyst pointed out the coin’s current trend. Although Cardano has been doing poorly as of late, the market still seems to be anticipating the worse for the currency based on the current downward angle.

Expectations and conjecture are not a guarantee, but they do help to outline the paths the asset could take in the future.

A Crash In The Offing For Cardano?

And as a result of the crypto market’s recent performance, this research may cause investors to worry about a possible impending crash.

The coin’s value has fallen from its recent high of $0.5043 at the market’s closing to its current level of $0.4574. This is a 90% discount, which is huge.

In spite of this, the value of the coin has remained relatively unchanged.

Cardano’s current price has been attempting to extricate from the 78.60 Fib level, which is now located at $0.5025. However, the bulls have not gained sufficient aggressiveness for this, making the price extremely volatile.

This inability to barrel upwards, together with the analysis, may indicate that the larger decline has already begun.

This decline may also be associated with the underperformance of other crypto assets. According to Coingecko, the 10 leading cryptocurrencies have been on a downward trend, with Ethereum losing 10% of its value in just a week.

Broader Market Seen To Experience More Pain

This linkage with leading cryptocurrencies can further push Cardano’s price towards the bottom. As a result of Bitcoin’s decline following the release of the latest CPI report and expectations of a 1% increase in interest rates, the broader market will continue to suffer greatly.

Latest headlines of the Vasil upgrade may not be sufficient to prevent a broad market decline. If Cardano’s future is to be bright, the crypto market as a whole must perform better.

This is extremely unlikely, though, considering Bitcoin closely follows the S&P 500 Index. In light of this, Cardano investors should prepare for another crypto market crash. If investor sentiment is resilient, a catastrophic scenario such as the one we just outlined can still be reversed.

As Cardano’s upgrade nears, additional information should become available over the next few days.

ADA total market cap at $15.5 billion on the daily chart | Source: TradingView.com

Featured image from Cryptocurrency News, chart from TradingView.com