Is XLM about to tank? ...or are we on the verge of a rebound?
Updated
Since my last XLMBTC analysis, we broke down and have reached for my bearish targets. Currently, XLM is looking very weak. It looks like it's on the verge of a total wipeout. Below here, we do have some support in the 2500-2600 area, and then bigger support at 2000. However, we appear to be in a bit of a falling wedge, which is a bullish pattern. All throughout 2018, XLM did very well compared to a lot of other alts, but has only recently caught up in terms of lost value. This tells me that the year long pennant was probably distribution. This makes sense, since XLM is one of the coins that saw the biggest gains in 2017.
Even though this looks like it's going to break down, we could have a risky long setup here. It's very possible that the coin has simply been under price suppression and will explode upwards rather quickly. Daily RSI has been in oversold for a while and it hasn't bounced at all since the big breakdown, unlike other coins. XRP has behaved similarly, but has yet to make a new low in both USD and Bitcoin value. A while ago, I speculated that if any coins were going to challenge Bitcoin's market cap, it would be XRP and XLM. Recent price action has told me that the XRP and XLM bulls have vacated the scene....but is that really the case? Maybe they're just waiting. We've reached my initial bearish target of around $0.10. Maybe others have been eyeing this level. Who knows? The market looks pretty horrible at the moment, but sometimes when things look the ugliest, they turn around. Often the time you feel like giving up is the time to keep on pushing.
RISKY LONG:
Buy here or between 2500 and 2600.
Stop loss below 2500, although I don't usually use stop losses in this market if you're day trading, since stop hunts are very frequent.
If we go below 2000, this coin will take a long time to recover.
TARGETS:
3200
3500
3700
4000
5000+
POSSIBLE SHORT SETUP:
Below 2500 or 2000. I guess here would be a risky short, since we're already close to a major support.
Although the best short setup was really the breakdown of 3500. A lot more obvious.
This is not financial advice or a recommendation to buy or sell. I'm not a professional. I'm just a hobby analyst.
Good luck!
-Victor Cobra
Previous XLM analysis:
Even though this looks like it's going to break down, we could have a risky long setup here. It's very possible that the coin has simply been under price suppression and will explode upwards rather quickly. Daily RSI has been in oversold for a while and it hasn't bounced at all since the big breakdown, unlike other coins. XRP has behaved similarly, but has yet to make a new low in both USD and Bitcoin value. A while ago, I speculated that if any coins were going to challenge Bitcoin's market cap, it would be XRP and XLM. Recent price action has told me that the XRP and XLM bulls have vacated the scene....but is that really the case? Maybe they're just waiting. We've reached my initial bearish target of around $0.10. Maybe others have been eyeing this level. Who knows? The market looks pretty horrible at the moment, but sometimes when things look the ugliest, they turn around. Often the time you feel like giving up is the time to keep on pushing.
RISKY LONG:
Buy here or between 2500 and 2600.
Stop loss below 2500, although I don't usually use stop losses in this market if you're day trading, since stop hunts are very frequent.
If we go below 2000, this coin will take a long time to recover.
TARGETS:
3200
3500
3700
4000
5000+
POSSIBLE SHORT SETUP:
Below 2500 or 2000. I guess here would be a risky short, since we're already close to a major support.
Although the best short setup was really the breakdown of 3500. A lot more obvious.
This is not financial advice or a recommendation to buy or sell. I'm not a professional. I'm just a hobby analyst.
Good luck!
-Victor Cobra
Previous XLM analysis:
Note
We've entered the buying zone. Note
We're getting to the bottom of the buying zone now. Below 2500, we don't have much support until 2000. The market needs to see some buyers step in ASAP to avoid a death spiral capitulation event, in my opinion.Note
So we've broken down. This was the entry for the short idea, but be careful. We haven't gotten much lower since breaking down from 2500. One could also go long here with a stop loss, perhaps. Although the last time we got to this zone (April), we had a pretty strong buying reaction that gave us some long wicks.Note
Struggling to get back above 2500. This leads me to believe we will have to at least test the low 2000's, but this market can be unexpected sometimes. Be careful with your trading, as we may some pretty extreme volatility soon!Note
We’ve had a nice bounce on XRP, which could indicate that XLM is about to follow. As I posted on my XRP chart, I expected money to flow out of TRX and into XRP and XLM.Note
Unfortunately XRP failed to push higher and reclaim its uptrend. Likewise, XLM has slid back to the 2300 area. We can expect a dump to 2000 soon, as the shorters are in control below 2500. We’re nearing the last chance for the market to hold 3K. I hope we do, but my gut is saying otherwise.Note
Just a small update. Looks like we made it close to 2000. The monthly support was closer to 2100 anyway. IF the low is set, this will be a monthly higher low, which is actually fairly bullish. If XLM can have a sustained bounce here, it could mean that the market as a whole is ready for an upswing. XLM has generally been a leading indicator during the bear market.Note
XLM has now made a monthly LOWER LOW, which isn't a good sign. However, as I've been mentioning in some of my other analyses, the end of an accumulation phase often occurs when price goes a bit below the previous support and finds buying support there. The same has happened with NANO. However, if the market decides to make another move down, XLM will not be fairing particularly well. We still have not seen any sort of SUSTAINED bounce.Note
Looks like we've failed to move any lower for now, and the whole market seems to be entering an accumulation zone (many alt have already started to move up, like LTC, ETH, NEO, and ONT). We may have to wait a bit longer for XRP and XLM though.Note
XLM May be about to break out of this zone. Confirmation would be a move above 2300.Note
Looks like we’re working on that 2300 resistance. If we can break above 10 cents that would be a great sign. Even if Bitcoin corrects a bit, as long as it still looks bullish we should see more alts start to go on some major runs.Note
After a failed rally, XLM isn't looking great again. Still consolidating. If the market decides to break lower here (which is possible), we could see XLM break below 2000, in which case this idea will be invalidated. That would set up much lower targets, like the 1300 area. 
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.