Stellar price could be done with its downtrend as a small double bottom can be seen on its 1-hour time frame. Price failed in its last couple of attempts to stay below the 0.20 mark, creating this classic reversal pattern with the neckline around 0.24.
The 100 SMA is still below the longer-term 200 SMA, so the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. Then again, the gap between the moving averages is narrowing to signal weakening bearish pressure. A bullish crossover could bring more buyers in and sustain a break past the neckline.
The chart pattern is approximately 0.04 tall, which suggests that the resulting uptrend could be of at least the same size. However, RSI is already in the overbought zone to signal that buyers are feeling exhausted at this point. Stochastic has a bit more room to climb before indicating overbought conditions but is also nearing that area as well. Turning lower could allow sellers to return and create another bottom.
Cryptocurrencies finished the previous week on shaky footing as the SEC decision to delay their ruling on some bitcoin ETF applications caused a lot of disappointment. Stellar also took additional hits when Facebook clarified that they’re not looking to tap into this blockchain for its social media platform yet.
However, it’s also helpful to note that Stellar continues to work on its partnerships, particularly in the payments space. To top it off, potential Coinbase listing also helped prop up this altcoin’s price.
Besides, Stellar has maintained a solid relationship with IBM so it may just be a matter of time before they announce a big development. For one, IBM is working on a stablecoin using the Stellar blockchain and is also running Stellar nodes to facilitate cross-border transactions.