Stellar (XLM) Price Hits a 3-Month Low – Unraveling the Factors Behind the Decline
Stellar (XLM) sees 3-month price low due to key factors, including a descending triangle pattern breach. Can XLM reverse the trend? Dive in to find out!
Stellar (XLM) has recently encountered a bearish trend, resulting in the cryptocurrency's price reaching a three-month low. This decline is attributed to several key factors.
Chart by TradingView
The Stellar (XLM) price experienced a breakdown from a long-standing descending triangle pattern on October 9th.
This pattern has confined XLM's price movement since July 13th, raising questions about the potential for further declines in XLM's price.
One crucial aspect contributing to the price decline is the breach of a long-term support level. The daily technical analysis reveals a consistent downward trend in XLM's price since July 13th, marked by the cryptocurrency's fall below a descending resistance trendline.
During this period, XLM exhibited multiple bounces above the $0.110 support level, forming a descending triangle pattern, a typically bearish signal.
The breakdown from this pattern was confirmed on October 9th with a daily close below the critical $0.110 horizontal support area. Consequently, XLM reached a low of $0.101 on October 12th, marking a new 90-day low.
Examining the daily Stochastics, a momentum indicator used to gauge overbought or oversold conditions, the situation is different. The Stochastic reading is currently coming back from the oversold levels, which is a bullish signal.
If XLM is able to break back above the new $0.110 horizontal resistance area, the cryptocurrency may start a new uptrend.
Bottom Line: Stellar (XLM) faces a challenging period with recent bearish developments, but the potential for a trend reversal remains contingent on the cryptocurrency's ability to break out from the triangle's resistance trendline.
