Here’s Why the Stellar Price Is Crashing Today

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As a seasoned analyst with over two decades of experience in the financial markets, I have seen countless instances of assets exhibiting wild swings and sudden reversals. The current downturn in Stellar (XLM) price is no exception to this rule.

As someone who has been closely following the cryptocurrency market for several years now, I have noticed that Stellar (XLM) has lost some of its momentum this month, with its price dropping nearly thirty percent from its year-to-date high. This is a common occurrence in the volatile world of crypto, and it’s something I’ve come to expect as part of the ride.

3 Reasons Why The Stellar Price Has Suffered A Harsh Reversal

The price of XLM has decreased significantly, nearly 30%, indicating a temporary downturn or local bear market this month. This drop may be due to investors cashing out their profits following a surge in price to $0.6355 on November 24. Earlier this year, the coin reached its highest point at an increase of 618% from its lowest value during that period. It’s not unusual for assets to experience fluctuations or retreat after experiencing an impressive rally.

It’s possible that the decrease in Stellar’s price is due to a phenomenon called mean reversion. In finance, this occurs when an asset tends to return to its typical or average price levels after experiencing significant fluctuations. However, it’s worth noting that XLM’s current price remains noticeably higher than its 200-day, 100-day, and 50-day moving averages, which suggests a possible deviation from this trend.

Following the Wyckoff Method’s perspective, I observe that the XLM price seems to be decreasing as it appears to have entered the markdown or distribution phase. According to this approach, assets undergo four distinct stages: accumulation, markup, distribution, and markdown, where they are accumulated by strong hands, marked up in value, distributed to weaker hands, and then marked down.

According to one crypto analyst, Javon Marks (with nearly 50,000 followers), the recent drop in Stellar’s value might be contributing to a bullish pennant formation. In simpler terms, he thinks that the coin could be shaping up into this technical pattern.

He also noted that the Relative Strength Index (RSI) was forming a falling wedge pattern, which could lead to a strong bullish breakout. He expects that the Stellar Lumens price will rise to $0.9 this year, implying a 96% surge from the current level.

XLM Price Analysis: Is The Rally Over?

Over the past few days, the Stellar Lumens price has pulled back. It’s currently stabilizing near its 50-day Exponential Moving Average (EMA). This dip in price also aligns with a decrease in the Relative Strength Index (RSI), which has shifted from an extremely overbought state of 94 down to 57. Additionally, the two lines of the Moving Average Convergence Divergence (MACD) indicator have crossed and are now trending downwards.

In a more conversational tone, it can be said: According to Javon’s analysis, the coin appears to be shaping up into a bullish pennant formation. This pattern consists initially of a long, vertical line, followed by a symmetrical triangle chart pattern. The bullish pennant is often seen as a continuation signal, indicating potential growth in the asset’s price.

Given the pennant theory holds true, there’s a possibility that Stellar’s price could recover in the coming days. If it does, it might surge and challenge its year-to-date peak of $0.6360. Overcoming this level would suggest further growth, potentially reaching $1 or even beyond.

From another perspective, if the price falls slightly below the 50-day moving average at $0.4413, it could contradict the optimistic outlook and suggest a possible decline towards the 50% retracement level at $0.3627.

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2024-12-09 14:57