Stellar has formed lower highs and slightly lower lows to create a descending wedge pattern on its 4-hour time frame. Price is hovering close to the peak of the formation, so a breakout could be due soon.
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. In other words, support is more likely to break than to hold. A break below the 0.095 support area could send Stellar lower by the same height as the wedge, which spans 0.095 to 0.145.
Also, the 100 SMA lines up with the wedge resistance around 0.105 to add to its strength as a ceiling. The gap between the moving averages is slowly widening to reflect strengthening selling pressure as well.
RSI is pointing down to confirm that sellers have control at the moment, but the oscillator is also dipping into the oversold region to signal that exhaustion is about to be seen. Turning back up could allow support to hold for the time being and another test of the resistance to take place.
Stochastic is just making its way down from the overbought zone to signal an increase in selling momentum. This oscillator has plenty of room to head south before reflecting oversold conditions, so bears could stay on top for much longer.
A few days back, Grayscale Investments included Stellar in its portfolio to signal that institutional money will be flowing in. In their announcement, the company said:
Grayscale Stellar Lumens Trust enables investors to gain exposure to the price movement of XLM through a traditional investment vehicle, without the challenges of buying, storing, and safekeeping XLM.
However, Peter Brandt who is one of the few well-known traders who predicted the crypto bear market since last year, brought bearish vibes with his tweet:
$XLM initially targeted .0653. Now it has targeted .00150. This means XLM is basically worthless. Sorry.
Images courtesy of TradingView