XLM price rallied a total of 58% in roughly 18 days between July 20 and August 8. While a similar ascent was seen across the cryptocurrency landscape, things have taken a turn as the big crypto retraces.
For Stellar, the Momentum Reversal Indicator (MRI) flashed a sell signal in the form of a red ‘one’ candlestick on the 6-hour chart, signaling exhaustion of the uptrend. This technical formation forecasts a one-to-four candlestick correction.
Therefore investors can expect the 10% descent seen so far to extend. The first support level that the bears are going to encounter is $0.262. While XLM price might consolidate here, a breach would push it to $0.251, which would constitute a 12% correction from the current position.
Due to the sideways movement seen around $0.251 during the run-up, market participants can expect this support floor to prevent further sell-offs.
Regardless of the bearish outlook, things could quickly turn around for XLM price if it reclaims $0.286. This move would suggest that the buyers are back. A further climb that swiftly produces a decisive 6-hour candlestick close above the August 8 swing high at $0.314 will invalidate the bearish thesis.
If the bullish momentum continues to pour in after this ascent, Stellar might tag the $0.331 resistance level.
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