Stellar (XLM) breaks out after forming a double bottom formation

Stellar

(XLM) has been moving lower since May, but briefly reversed its trajectory and bounced back on June 22. Sponsored Sponsored

XLM has formed a bullish pattern and is now moving towards the nearest resistance levels.

Long-term support levels XLM

Stellar has been moving downward since May 10, after peaking at $0.80. The downward movement continued until reaching a low at $0.195 on June 22.

Sponsored Sponsored

This bottom was reached at the support level at the 0.786 Fib retracement at $0.192. This is also a strong horizontal support area. The subsequent bounce has confirmed this.

However, despite the rise, technical indicators on weekly intervals are still bearish. The RSI indicator is below 50, the stochastic oscillator has formed a bearish cross and the MACD

is almost negative. Stellar (XLM) breaks out after forming a double bottom formationStellar (XLM) breaks out after forming a double bottom formation XLM chart via Tradingview

Breakout and double bottom

The daily chart is more bullish than the weekly chart.

Stellar broke out of the falling resistance line after reaching the June 22 low. Then, the price moved back near the same level on July 20, forming a double bottom formation.

In addition to being a bullish pattern, the double bottom

was combined with bullish divergences on the MACD, RSI and stochastic oscillator.

The nearest resistance areas are at $0.427 and $0.498. These are resistance levels at 0.382 and 0.5 Fib retracements.

Stellar (XLM) breaks out after forming a double bottom formationStellar (XLM) breaks out after forming a double bottom formationXLM chart thanks to Tradingview

Number of waves

Cryptocurrencytrader @TheTradingHubb

outlined a chart of XLM, stating that the price is approaching a resistance area near $0.29. Stellar (XLM) breaks out after forming a double bottom formation <img src=”https://yellowrocketagency.com/wp-content/uploads/2021/07/E66ClK3VgA0DV3x.jpg” alt=” width=”1449″ height=”897″ />Source: Twitter

If the move is indeed a flat A-B-C corrective structure, then Stellar should peak near the $0.292 level. This would give waves A:C a 1:1 ratio.

The next most likely area for a wave C top would be the $0.35 level. This would give waves A:C a ratio of 1:1.61 Neither of these targets would reach any of the resistance levels that were outlined earlier. This casts doubt on the possibility that this is a flat A-B-C structure.

Stellar (XLM) breaks out after forming a double bottom formationStellar (XLM) breaks out after forming a double bottom formation XLM chart courtesy of Tradingview

In any case, the 2-hour chart is showing weakness, warning of impending rejection.

There is significant bearish divergence on both the MACD and RSI.

If XLM breaks down, the nearest support levels are at $0.251, $0.241 and $0.231.

For the latest analysis of Bitcoin (BTC) by BeInCrypto, click here

.

Explanation

All information contained on our website is published in good faith and for general information purposes only. Any action taken by the reader in relation to the information on our website is solely at the reader’s own risk.