Stellar Lumens (XLM) started out life as a fork of the Ripple code, but since its launch it has decided to take a rather different path in life to Ripple. Rather than focusing on banks, Stellar has put its XLM to use by helping everyday people transact faster and more efficiently. Yet, its poor marketing tactics and lack of news coming from the developer camps has led to XLM slumping month after month – even a recent bullish run on altcoins failed to budge the price.
Things are now starting to look a lot worse for the long-term outlook of XLM’s price, as support stumbles around the $0.07 mark. If current trends stay on course, we could see XLM sink considerably lower as we head into the weekend.
$0.05 is on the Cards
The XLM bears are in the driving seat and have been for quite some time now. XLM saw very little in the way of support as prices crashed from the $0.08 mark all the way down to the bottom end of $0.06 earlier in the week. That trend is continuing as XLM had a close below $0.0725 and the 55 SMA (4hrs), dipping as low as $0.00650 at one point. Fortunately, the bulls have had a bit of a breakthrough, pushing XLM back towards $0.0721, but this momentum doesn’t look set to last much longer.
There is a bearish trendline forming with significant resistance at $0.074 on the 4-hour chart, an indicator that many XLM traders don’t want to see right now. This means as the bulls try to break through the $0.074 region they’re going to face stiff resistance, and momentum could fail. If XLM bulls lose the momentum, we could see a fresh 50% Fibonacci retracement level take XLM all the way down to the bottom end of $0.06 or even as low as $0.058.
Could XML’s Fortunes be in the Hands of McCaleb?
Currently, Stellar’s founder Jed McCaleb is being accused of assisting in the theft of the Mt Gox Bitcoin as he sold the platform full of bugs. The news of this court case hit XLM’s value hard back in June, and XLM failed to enjoy any of the upwards momentum wider crypto markets saw. It was almost a year ago that we saw XLM nudge out EOS and become a top-five cryptocurrency, but that story wasn’t set to end well. If McCaleb can shake off this court case, we could see XLM slowly begin to rise, shaking off the bearish sentiment that has been plaguing its price for so long.
XLM bulls have a tough few sessions ahead of them, but as long as they can break through the $0.074 resistance level, we could see XLM move upwards back into the $0.08 region. However, given the huge amount of resistance and sell walls in place, this will be a tough task for the XLM bulls.