What's going on with STELLAR!? Let's take a look. As we can see here on the four hour chart, stellar was trading inside of a pattern known as an ascending broadening wedge (blue dashed trendlines.) On January 2nd, XLR broke out of the wedge, and went parabolic until it made an all time high on the 4th. Since then, we can see that Stellar has been in a downtrend, as it has formed lower highs and lower lows. However, despite the recent downtrend in XLR, we can see that it held support twice, on the rising trendline that it originally broke above. This is actually very constructive price action, because XLR is experiencing a healthy retracement, and it's defining the breakout level as new support. Just FYI, in technical analysis, when resistance or support is broken, traders often watch to see price action return to the breakout level, to retest it, and confirm it as new support or resistance. If we see it start to rally in XLR, that will indicate that the breakout level has been confirmed as new support, and that is a short-term buy signal. Looking at the chart, I see that XLR is currently under the 50 EMA (in orange,) and it's spending a lot of time on the top of the dashed blue trendline. Also, we can see that volume has dropped significantly during the selloff (indicating exhaustion in the sellers) and the MACD is starting to curl upward, which is a precrusor to a positive shift in momentum. Right now, the blue dashed trendline is the most important level on the chart. If it is broken, prices will begin to fall back into the ascending broadening wedge (which is typically a bearish pattern BTW.) So the bulls need to push XLR higher, because the more time XLR spends on that trendline, the more likely it is to break it.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
So what's happening to XLM now that it has broken the ascending wedge? Might it be worth it to sell into ETH - or is ETH possibly due for a correction itself? Curious to know your take with this new info! Thanks!
MagicPoopCannon
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@Investor123, I am seeing broad weakness building across most crypto charts. It appears as though the crypto market is setting up for a big flush to the downside. That may or may not happen though. We will have to monitor the charts as things progress. Please check out my most recent post, on XLM. Good luck trading! =D
Investor123
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@MagicPoopCannon, Thanks for the reply! I'm afraid the rise we're seeing in ETH could also be an illusion, created by a mass sale of alt coins into ETH. Is it only a matter of time before the sellers get exhausted in alt coins, and then turn with a vengeance on ETH as they convert their ETH into cash? What about USDT? How safe is it really if the whole crypto world takes a sudden dramatic plunge? Good luck to you as well my friend!