Why Stellar Lumens May Crash After 80% Rally in Last 7 Days
The post Why Stellar Lumens May Crash After 80% Rally in Last 7 Days appeared on BitcoinEthereumNews.com. XLM price rally lost momentum in the past two consecutive days as the crypto market bull run faded. Stellar Lumens token plunged to a low of $0.4300 today, July 15, down by over 16% from the YTD high. This article explores why the XLM token may plunge by 40% in the coming days. XLM Price Mean Reversion Could Trigger a 40% Crash The daily timeframe shows that the XLM price went parabolic last week, hitting a high of $0.5145 as the crypto market rally intensified. This surge pushed it significantly higher than its recent moving averages, while oscillators such as the Stochastic and the Relative Strength Index (RSI) reached extremely overbought levels. The main risk that the Stellar price faces is known as mean reversion. This refers to a situation where assets that have deviated so much from their moving averages move back close to them. In XLM’s case, its current price of $0.45 is much higher than the 50-day and 100-day moving averages at $0.2900 and $0.2837, respectively. Therefore, the token may plunge by 40% to approach the two averages. XLM formed a mean reversion in November last year when it surged by nearly 500% and deviated from its moving averages. It then dropped gradually until it closed that gap months later. The other risk that the Stellar Lumens price faces is that it has deviated substantially from the upper side of the descending channel that connects the highest and lowest swings since December last year. In most cases, an asset often retreats and retests the former resistance after it makes a strong breakout. This situation is known as a break-and-retest pattern, and is usually a highly bullish sign. Therefore, the most likely scenario is where the XLM price drops by about 40% and then resumes the bullish trend.…
The post Why Stellar Lumens May Crash After 80% Rally in Last 7 Days appeared on BitcoinEthereumNews.com.
XLM price rally lost momentum in the past two consecutive days as the crypto market bull run faded. Stellar Lumens token plunged to a low of $0.4300 today, July 15, down by over 16% from the YTD high. This article explores why the XLM token may plunge by 40% in the coming days. XLM Price Mean Reversion Could Trigger a 40% Crash The daily timeframe shows that the XLM price went parabolic last week, hitting a high of $0.5145 as the crypto market rally intensified. This surge pushed it significantly higher than its recent moving averages, while oscillators such as the Stochastic and the Relative Strength Index (RSI) reached extremely overbought levels. The main risk that the Stellar price faces is known as mean reversion. This refers to a situation where assets that have deviated so much from their moving averages move back close to them. In XLM’s case, its current price of $0.45 is much higher than the 50-day and 100-day moving averages at $0.2900 and $0.2837, respectively. Therefore, the token may plunge by 40% to approach the two averages. XLM formed a mean reversion in November last year when it surged by nearly 500% and deviated from its moving averages. It then dropped gradually until it closed that gap months later. The other risk that the Stellar Lumens price faces is that it has deviated substantially from the upper side of the descending channel that connects the highest and lowest swings since December last year. In most cases, an asset often retreats and retests the former resistance after it makes a strong breakout. This situation is known as a break-and-retest pattern, and is usually a highly bullish sign. Therefore, the most likely scenario is where the XLM price drops by about 40% and then resumes the bullish trend.…
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