Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- A weekly candlestick below $0.131 could expose XLM to more losses.
- Swinging financing rates and negative outstanding interest can favor sellers.
Stellar [XLM] could take a cue from its price action in Q3 2022 if bearish pressure continues. The extended pullout threatened to crack a key support zone and wipe out the rest of July’s gains.
Is your wallet green? look at the XLM Profit Calculator
XLM has been consolidating July gains above $0.1250 since mid-July. However, the bearish pressure of the past few weeks has caused the retracement to be extended to the April (Q2) high of $0.115. If this earlier price cap breaks in the second quarter, more losses are likely.
Bulls out to defend Q2 high as support
Source: XLM/USDT on TradingView
The $0.113 – $0.130 (cyan) support zone, bordering the second quarter highs, is holding sellers back from seeking more ground. Although it turned green after a recent retest on the daily chart, indicating that the bulls intend to protect it, the weakening Bitcoin [BTC] rush.
A session closing below $0.131 on the weekly chart could confirm additional leverage from sellers. Such a move puts XLM within the Q3 2022 price consolidation range of $0.099 – $0.131. If so, a price rejection at the previous range high ($0.131) could push the altcoin down to the range low ($0.099).
Conversely, a move and a convincing close above $0.131 could confirm bullish intent. But such a move could be utopian considering weak BTC in $25k.
In addition, the RSI was in the negative zone, despite signs of a reversal. On Balance Volume (OBV) also fell slightly, amplifying the dip in demand for the altcoin.
The funding rates fluctuated
Source: Coinalyse
According to Coin analysis, there have been significant swings in financing rates since mid-August, tipping the scale in favor of sellers. The cumulative green bars indicate positive funding rates and a bullish signal, while the red bars indicate a bearish bias.
How many Worth 1,10,100 XLMs today?
If XLM takes a cue from the price action in Q3 2022, it is reasonable to short XLM on the previous range high with take profit on the range low.
However, more shorts, >$50k, have liquidated in the last 24 hours before the time of writing. It suggests a likely price spike to the upside, but a weak BTC could complicate things.