- Stellar remains stagnant after seeing its market value crash by 50% in late February.
- Now, two critical price levels will determine the next direction for XLM.
- A 4-hour candlestick close outside of the $0.42-$0.39 price pocket will result in a 34.50% move in that direction.
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Stellar’s price action suggests that volatility is about to strike back.
Stellar Primed for Volatility
XLM’s market value dropped by 50% after reaching a new yearly high of $0.61 on Feb. 13. The downswing seems to have been fueled by a market-wide correction that caused over $6.5 billion in liquidations.
While some altcoins managed to recover the losses incurred, Stellar entered a stagnation period.
The twelfth-largest cryptocurrency by market capitalization has been consolidating over the past two weeks, making a series of lower highs and higher lows along the way. When drawing a trendline around each pivot point, XLM’s price action formed a symmetrical triangle on its 4-hour chart.
Stellar is now edging closer towards the triangle’s apex, indicating that a volatile move is underway. A 4-hour candlestick close above $0.42 or below $0.39 would likely be followed by a 34.50% move in that direction.
This target is determined by measuring the height of the triangle’s y-axis and adding it to the breakout point.
Stiff Resistance Ahead
Despite the ambiguous outlook that Stellar presents, the odds seem to favor the bears.
The parabolic stop and reverse, or “SAR,” moved on top of XLM’s price in late February, which indicates that the trend changed from bullish to bearish. Until another flip over occurs, this trend-following indicator will remain bearish.
Only a 4-hour candlestick close above $0.43 will signal the downtrend’s exhaustion, based on the stop and reversal…