XLM could see a near-term revival based on these key levels


Ever since Stellar (XLM) lost the $0.3 resistance (previous support), the alt has swiftly declined towards its long-term support at the $0.16-level.

From here on, any close above the $0.1737-mark would open up gates for a recovery towards its 20 EMA (red). Post that, a clash between the buyers and sellers at the $0.177-level would be likely before XLM sees a slight pullback. At press time, the alt traded at $0.173, down by 2.13% in the last 24 hours.

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XLM 4-hour chart

Source: TradingView, XLM/USD

Since XLM fell below the $0.3-mark, it turned downward and traded between the $0.16-$0.29 range for over three months. The recent bearish phase marked two down-channels as the alt lost nearly 37.23% (from 8 February) and hit its 13-month low on 24 February.

During this phase, the price fell below the 20-50 EMA and struggled to find a sustainable close above them. The fall halted at its 14-month ($0.16) support, where the buyers stepped in to initiate a 24.6% recovery.

While the bears refrained from giving a free hand to the bulls at the $0.2-mark, XLM retested the $0.169-mark. However, from this level, the alt saw an inverted bullish hammer as the bulls endeavored to revive. 

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With the recent gains and buyers trying to build up pressure at the upper trendline of the down-channel (yellow), a close above the pattern would brace XLM for a $0.177 retest. If the buyers dwindle, a probable retest of its immediate support before a strong recovery could occur. 

Rationale

The bearish RSI revived itself from the oversold mark and attempted to overturn its trendline resistance. Any close above this line would find a barrier near the 40-mark. Post which, the recovery could be much faster.

Furthermore, the MACD continued to skew in favor of bears and was yet to find a close above its equilibrium. A bullish crossover on its lines could be a potential entry trigger for the bulls. 

Conclusion

Keeping in mind the bullish candlestick pattern and the ease in selling influence, XLM could see a near-term revival. Besides, the investors/traders should factor in the broader market sentiment and the on-chain developments to make a profitable move.


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