The price of Stellar’s lumen cryptocurrency is fast fading.
After rising to $0.05 last week, the value of the native token that runs the Stellar protocol is down 36 percent from that recent high today. At press time, the stellar-US dollar (XLM/USD) exchange rate is $0.033. Week-on-week, XLM is down 8.33 percent, while on a monthly basis, it is up 177 percent.
The decline follows XLN’s rally of more than 100 percent on Oct. 16 after news hit the wires that IBM and Stellar were testing the cryptocurrency for cross-border payments.
Currently, the project is designed to handle South Pacific currencies – Australian dollar, the New Zealand dollar and the Tonga pa’anga. Through Stellar’s lumen, consumers will be able to trade fiat currencies without even touching the cryptocurrency.
Still, while the market euphoria in response to the news is calming at press time, the price of lumens is holding above the key support level of $0.02755.
What does this mean for traders ahead? Price action analysis suggests the decline from $0.05 could be a bear trap, and that there is a potential for another boost if support holds.
The above chart shows:
- Rounding bottom breakout.
- Aug. 5 high of $0.02755 is acting as a strong support.
- The relative strength index (RSI) and the money flow index (MFI) favor price rally.
- A rebound from the support offered by Aug. 5 high of $0.02755 followed by a move above $0.04 would open doors for $0.05 (Oct. 16 high). A violation there would open up upside towards $0.05782 (June 8 high).
- On the downside, only a break below $0.02 would signal a short-term bullish-to-bearish trend change.
Sun shine via Shutterstock
The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at firstname.lastname@example.org.
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.