Key Takeaways
- XLM surged 31% in July after defending key support. Bullish momentum builds, but resistance at $0.3–$0.32 may cap gains unless flipped to support. Traders remain cautious amid BTC-led rally.
Stellar [XLM] has quietly had a brilliant start to July. After defending the local demand zone at $0.22, XLM has 31% since the 2nd of July.
With Bitcoin [BTC] at a new all-time high, bullish euphoria across the crypto market was high. There was a threat of volatility in the short term, and traders need to assess their risk and choose position sizes carefully.
Source: XLM/USDT on TradingView
The weekly chart showed a sizeable pullback after the swift rally in November.
This pullback reached the 78.6% Fibonacci retracement level in April at $0.207. It almost retested the same support level at the beginning of July, reaching $0.217.
The bullish performance since then made the case for a Stellar recovery on the cards.
The weekly chart still shows a bearish market structure. A close above $0.334 on the weekly timeframe will confirm a bullish reversal.
Until then, traders should expect sideways movement within a range.
Meanwhile, long-term investors may consider accumulating, as recent pullbacks suggest the asset is entering a consolidation phase.
The psychological $0.3 level stands in the XLM bulls’ path
Source: XLM/USDT on TradingView
The 1-day chart showed a bullish outlook for XLM in July. A market structure break was achieved with a move beyond $0.245, and XLM has gained 20.1% since the 7th of July.
The CMF surged above +0.05, reaching +0.23 to reflect remarkable buying pressure. The Awesome Oscillator also saw a bullish crossover above the zero line to indicate a momentum shift.
Yet, this was not the time to go long. The 1-day chart showed a bearish order block (red box) that extended from $0.295 to $0.32. Therefore, traders already in a long position could look to book profits.
If this resistance zone were flipped to support, swing traders can look to go long again.
In the meantime, Bitcoin is expected to lead the rally now that it has set a new all-time high. Its price action might have to cool down and form a short-term range before altcoins can catch up with BTC’s performance.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
