Stellar Lumens has dropped another -8% after failing to hold on to the recent gains. The XLM price is now looking vulnerable to steeper declines.
Stellar is trading at $0.3517 and lower on the day after failing to hold yesterday’s support level. The market cap has slipped to $8.4 billion, from a high of $18 billion earlier this month.
Most of the crypto universe has been trading in step recently. Maybe the rise and fall have been to a lesser or greater degree, but the direction has been the same in general.
Typically, the assets with lower market cap and lower liquidity will follow Bitcoin and Ethereum. But because of the smaller size, the moves can be much more volatile.
Therefore, the sharp fall in Bitcoin just over 10 days ago filtered through to the XLM price. At its low point on the 19th, Stellar traded at $0.2600, down over -65% from the $0.7980 high a few days earlier.
The market did snapback from the low, rallying +105% to $0.5350. However, the price has been unable to hold the gains and is again tracking lower. After breaking below the recent support level, the XLM price may be on its way back to the lows.
XLM Price outlook
As I wrote yesterday, XLM was in a precarious situation and needed to hold the support line at $0.4040. As we can see on the chart, that didn’t happen, and the price slipped lower to $0.3647.
XLM then bounced back to the $0.4040 level, which is now acting as resistance. This price then reversed from the resistance to the current price.
Below $0.4040, the XLM price is likely to continue its downward momentum, targeting the recent low at $0.2600.
However, a break above resistance would be a positive development and likely lead to an extension to the $0.500-$0.5550 area.
Stellar Lumens 2-Hour Chart
Follow Elliott on Twitter.