Will the low range facilitate Stellar’s retracement?

Posted: September 18, 2023

Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.

• XLM has been stuck in a price range since mid-August.
• XLM demand fell further in the derivatives segment.

Stellar [XLM] has presented consistent profits to swing traders in recent weeks. In the first week of September, the recovery from the range low ($0.11) to the range high ($0.13) offered a gain of more than 18% for the bulls.

Is your portfolio green? look at the XLM Profit Calculator

The retracement of the range high, as we saw it at the time of writing, could hit the range low, effectively giving sellers a 15% gain. But could this yield additional gains ahead of the Fed’s decision on September 20?

Is another rebound likely at the lowest level?

Source: XLM/USDT on TradingView

Since mid-August, XLM bulls have defended the low in the $0.11 range, which is close to the weekly bullish order block (OB) of $0.095 – $0.109 (cyan). The last two retests of the range low reached the range high.

If the trend repeats alongside a favorable Fed announcement on September 20, XLM could rebound at the low ($0.11) and target the mid or high level.

A rise above the confluence of the range high and bearish OB in the second half of the year near $0.13 could tilt the bulls to extend gains to $0.14.

However, any additional pullback past the range low could soften the weekly bullish OB.

Meanwhile, the RSI retreated to the low range and wavered, indicating that buying pressure was falling and stagnating. However, the CMF was above its threshold but moving sideways, indicating that capital inflows were positive but stagnant.

Demand for Stellar fell

Source: Coinalyse

Futures market data showed a more bearish bias. For example, open interest rates fell by about $10 million between September 9 and 17. It indicates a long-term decline in demand for XLM in the derivatives segment.

How many Worth 1,10,100 XLMs today?

Excessively negative financing rates during the same period further tipped the balance in favor of sellers.

Additionally, the Accumulative Swing Index (ASI), which tracks the strength of price swings, was trending downward and turned negative at the time of writing, reinforcing a strong downward trend.

So a retest of the range low was likely, and bulls could see a reprieve at this level.