Amidst another bear market this morning many cryptocurrencies are feeling the brunt of BTC’s poor performance, as the #1 crypto struggles to break above $8,500.
At the time of writing XLM is suffering the second biggest loss in the top 10 against BTC, at -9.25%; with EOS flagging into double digits, with a -10.64% loss.
With a bearish head and shoulders pattern edging towards completion on the Stellar Lumen charts, how well will the asset’s support hold out as other alt-coins in the market start to make quick recoveries?
Over 1hr candles above, Stellar Lumens has started to come down from the peak of the right shoulder in this H&S pattern, having failed to retest the same sloping resistance level (upper white line) met by the left shoulder in a previous bull run.
As you can see, the 50 EMA (blue) is starting to show early bearish signs of a crossover below the 200 EMA line (yellow) which confirms the current downtrending prediction.
At the moment the token is sitting below the 0.382 fib level (4,045 Sats) which should now act as a strong resisting level to assist in holding the price action down against any bullish retracement.
Short-term momentum indicators over 30min candles are slightly favouring bullish traders, with MACD and RSI both showing upward movement in both their channels. However, with Bitcoin still losing its battle with a key resistance level, it’s unlikely XLM will be able to hold on to this support for much longer.
From here we are expecting the price to continue in a bearish downtrend towards the neckline, at around 3,500 Sats, where this pattern is projected to complete itself.
Stellar Lumens (XLM) Price Prediction
Upon completion, these bearish H&S patterns tend to retrace back close to original price before the opening bull run that initiated the first shoulder; in this case around 3,000 Sats, after dropping below the 0.5 fib level.
From the current price around 4,000 Sats, this would constitute a -25.00% drop in the token’s value.
Depending on market sentiment and BTC’s performance at this stage we could see further bearish momentum force XLM down more, particularly as short-term investors withdraw their losses and redistribute funds into more profitable coins.
A second support region for this bearish decline is way down at the base 2,600 Sats level where we would expect a bullish rebound. This is the same support area that XLM was able to hold at during the heavy market crash we experienced back in March this year.
Overall this would deliver a -35.00% loss from the alt-coins current value.
This article appeared first on Cryptovest
