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Stellar Lumen Price Analysis XLM / USD: Turning Point

A double-digit recovery put it at a crossroads.

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  • Stellar Lumen remains technically bearish across the short and medium-term
  • The four-hour time frame shows that a bearish breakout from an ascending triangle pattern is underway
  • The daily frame continues to show a head and shoulders pattern in play

Stellar Lumen is attempting to build on recent trading gains, after the cryptocurrency recovered nearly thirty percent in value from the late-September market slump. However, both the four-hour and daily time frames currently warn that it may be too early to call a long-term bottom in the cryptocurrency.

With the entire cryptocurrency market technically bearish and many top coins still pulling lower, the XLM / USD pair still faces a monumental challenge to change its overall trading outlook. Both the four-hour and daily time frames highlight bearish pattern breakouts.

The four-hour time frame shows that a bearish breakout from an ascending triangle pattern has recently occurred, although downside momentum is lacking. Should a bullish reversal occur above the pattern, the upside projection of the pattern suggests a possible recovery towards the $0.074000 level.

Furthermore, the daily time frame is also showing that a huge inverted head and shoulders pattern could start to take shape if the XLM / USD pair recovers towards the June 26th swing-high.

In the near-term, a bearish head and shoulders pattern is currently in play across the daily time frame, with buyers needing to move price above the $0.084000 level to relieve downside pressure.

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Going forward, short-term buyers urgently need resume the recent recovery. If an upside recovery is not forthcoming over the coming sessions, the XLM / USD pair risks slumping back towards its current yearly trading-low, around the 0.048800 level.

According to the latest sentiment data from TheTIE.io, the short-term sentiment towards Stellar Lumen is neutral, at 46.00 %, while the overall long-term sentiment towards the cryptocurrency is also neutral, at 48.50%.

XLM H4 Chart October 2 by TradingView
XLM / USD H4 Chart by TradingView

Upside Potential

The four-hour time frame highlights that a bullish ascending triangle pattern has formed, if bulls can force a breakout, the upside projection of the pattern extends towards the $0.074000 level.

The four-hour time frame shows that XLM / USD pair’s 50-period and 200-period moving averages are converging around the $0.062500 to $0.063500 area. Bulls must rally price above this key technical area to encourage more short-term action.

XLM Daily Chart October 2 by TradingVIew
XLM / USD Daily Chart by TradingView

Downside Potential

The downside is likely to open up for the XLM / USD pair if the bearish triangle pattern breakout starts to gather momentum. The current yearly trading low is the overall downside objective of the bearish break.

Cred - Crypto that isnt cryptic
Cred - Crypto that isnt cryptic

Once below the current trading low, the XLM / USD pair is in a very vulnerable technical position, as the cryptocurrency has almost non-existent long-term support.


Summary

Stellar Lumen has staged an impressive double-digit recovery from its 2019 trading low, which could mark an important long-term price floor.

The XLM / USD pair needs to hold price above the $0.063500 level to inspire a possible rally towards the $0.074000 level. If a rally fails to materialize, the cryptocurrency could come under severe downside pressure.

Check out our coin guide for XLM.

Our analyst team also covered Stellar, offering a deep look into the project.

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