XLM, the primary asset of the Stellar network, is facing a notable risk of substantial losses due to a bearish pattern detected in its four-hour price chart. The altcoin is currently trying to sustain its value above a crucial support point, yet the existing negative sentiment in the market combined with technical signals indicates a possible price drop of up to 30%. Analysts warn that XLM appears to have completed a head and shoulders pattern and could potentially drop to $0.19 if it closes below the $0.265 threshold.
What Does the Technical Analysis Reveal?
The head and shoulders pattern identified on XLM’s chart is considered a traditional bearish indicator. Should the altcoin lose its footing below $0.265, projections suggest it may target a decline to $0.19. XLM’s performance is further hampered as it trades below the 200 Exponential Moving Average in both the daily and four-hour charts, confirming a prevailing downward trajectory.
What Are the Current Market Conditions?
In recent trading, XLM has experienced a loss exceeding 4.5%, currently hovering around $0.275. A significant drop of 35% in trading volume signals hesitance among traders. The risk of liquidation for over-leveraged positions near the $0.27 mark is particularly concerning, which may heighten the selling pressure on this altcoin.
– A bearish head and shoulders pattern is observed, forecasting potential drops to $0.19.
– XLM is trading below key moving averages, indicating a strong downward trend.
– Caution in trading has resulted in a notable drop in volume and increased liquidation risks.
– Market sentiment is negatively influenced by broader macroeconomic challenges.
With limited market activity, XLM is particularly sensitive to technical levels. Increased volatility in Bitcoin and ongoing economic uncertainties add extra pressure, suggesting that a breach of short-term support levels could trigger stop-loss orders among traders, propelling the downward momentum further.
