Stellar formed an inverse head and shoulders on its 1-hour time frame to signal that bulls are ready to charge again. Price has yet to break past the neckline around 0.38, though, to confirm the potential uptrend.
The 100 SMA is still below the longer-term 200 SMA so the path of least resistance is to the downside. However, the gap has narrowed enough to signal a likely upward crossover and return in bullish momentum. The moving averages also seem to be holding as dynamic support.
RSI is pointing down on its way out of the overbought region to signal that sellers have the upper hand. Similarly, stochastic is also heading south so Stellar might follow suit. Both oscillators have some room to go before hitting oversold levels, so bearish pressure could stay in play for a time.
Still, an upside break past the neckline could lead to a rally of the same height as the chart pattern which spans 0.30 to 0.40.
Stellar has been one of the first few altcoins to pull up from the recent dive in cryptocurrencies, signaling that it might have the strongest bullish potential.
Note that Stellar forked from Ripple a few years back but it also offers the opportunity of making cross-border transactions at very low cost but very speedy. It has been able to sign a partnership with IBM to showcase cross-border transfers featuring unique currencies of South Pacific countries by developing a platform supported by Stellar and the use of XLM.
Its recent fork with Kin was being blamed as the main factor for the more recent slide, with Netanel Lev, the Vice President of Research and Development at the Kin Ecosystem Foundation, stating:
“Most crypto projects to date have been technology-driven first and product-driven second. Kin has always been the opposite. After working heads down alongside the best minds in the industry we came to the conclusion that a hybrid solution of Ethereum and our own fork of Stellar would benefit the Kin Ecosystem both short and long-term.”
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