Stellar Lumens / USD Technical Analysis: Flipping On Its Head
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- Stellar Lumen is bullish over the short-term with the four-hour time frame showing technical indicators rising
- A larger bullish inverted head and shoulders pattern is now present on the four-hour time frame
- The daily time frame shows price edging closer to the top of the descending price channel
Stellar Lumen / USD Short-term price analysis
In the short-term, Stellar Lumen has a bullish bias with the cryptocurrency recently rallying towards its highest trading level since late January this year.
The recent move higher has also created a larger inverted head and shoulders pattern on the four-hour time frame, with neckline resistance found at the January 26th trading high.
Technical indicators are rising on the four-hour time frame, with the latest move higher eradicating bullish MACD price divergence that was present from earlier this year.
XLM / USD H4 Chart (Source: TradingView)
Pattern Watch
Traders should note that the recent move higher in the XLM / USD pair has negated a bearish head and shoulders pattern and created a much larger inverted head and shoulders pattern on the four-hour time frame.
MACD Indicator
The MACD indicator is currently generating a strong buy signal on the four-hour time frame.
Relative Strength Index
The RSI indicator is also bullish on the four-hour time frame, although it has moved into overbought territory.
Fundamental Analysis
The uptrend was initiated by the German media company Börsenmedien AG, which announced the acquisition of a 5% stake in SatoshiPay, a micropayment solution, that utilizes Stellar blockchain.
According to Börsenmedien AG:
“Both companies are currently working on integrating SatoshiPay’s payment solution into Börsenmedien AG’s digital media outlets. Using SatoshiPay, online readers will be able to pay for premium content with just one click. The solution leverages Blockchain technology, supplied by the Stellar distributed ledger network, to send payments directly from the reader’s wallet to the publisher. This is done without any intermediary and with network transaction costs significantly below 1c.”
Börsenmedien AG is a media house for financial information in German-speaking regions. It owns Germany’s largest stock market journal DER AKTIONÄR and DER AKTIONÄR TV, the TV portal for investors.
Stellar Lumen / USD Medium-term price analysis
Stellar Lumen still remains bearish over the medium-time frame, due to the XLM / USD pair still trading well below its trend defining 200-day moving average.
The daily time frame shows the XLM / USD pair moving rapidly towards the top of a descending price channel, which the popular cryptocurrency has been trapped within since December 2018.
A sustained break above the descending price channel would likely signal a bullish breakout in the XLM / USD pair, with the cryptocurrency’s 200-day moving average the most likely initial upside target.
Traders should also note that the daily time frame still shows bullish MACD price divergence from 2018 that has yet to be reversed.
XLM / USD Daily Chart (Source: TradingView)
Pattern Watch
Traders should watch for the potential formation of a bullish inverted head and shoulders pattern on the daily time if the upside recovery reaches the December 21st trading high.
MACD Indicator
The MACD indicator is trending higher on the daily time frame and is generating a bullish trading signal.
Relative Strength Index
The RSI indicator has turned bullish on the daily time frame, although it has now moved into overbought territory.
Fundamental Analysis
In the medium term, the new partnership announcements would support price growth. However, there are still many questions surrounding the project, including its governance, token economics, and high level of centralization that elevate associated risks. We analyzed Stellar in detail and published a DARE report, which is available here.
Conclusion
Stellar Lumen is growing increasingly bullish over short-term, with the four-hour time frame now showing a much larger bullish pattern. It is worth noting that a sizable MACD price divergence remains in play across the daily time frame from last year.
If the XLM / USD pair can break out from the descending price channel on the daily time frame, bulls could soon mount a challenge towards the cryptocurrency’s key 200-day moving average.
For a short refresher of the project, check out our Coin Guide for Stellar here.
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