XLM heading for major support

The Stellar Lumens price is finding $0.40 a tough nut to crack. As a result, XLM is on its way to a must-hold level which will decide its fate. Like most of the cryptocurrency market, Stellar has spent the last two weeks in limbo, undergoing a period of price discovery. And soon, we will discover which path the price will take.

Stellar Lumens (XLM/USD) has seen a return to form recently. Bitcoins’ ascent to $50,000 has encouraged investors to return in droves to the out-of-favour altcoin market. As a result, many coins and tokens have enjoyed incredible bull runs. And some, such as Cardano (ADA/USD), have even surpassed the heights achieved earlier this year. However, despite gaining 114% from July’s low, Stellar was still half the price of that in May. Furthermore, XLM has since given back 20% of the rally. Not only has this foiled the chances of a breakout, but it has also left the Stellar Lumens price in danger of breaking down.

XLM Price Forecast

Turning to the daily chart, we see that Stellar has been testing the resistance of a downtrend in place from May’s high of $0.80438. And since the 16th of August, the trend at $0.3800 has consistently rejected the price. This is concerning for the bulls.

Furthermore, after failing to clear trend resistance, XLM has fallen towards a tight group of moving averages, the 50 DMA at $0.3207, the 100 at $0.3330, and the important 200-day at $0.3358. With XLM trading at $0.3415 (-2.37%), we will soon determine if the averages will stem the decline. If they don’t, horizontal support at $0.3000 must. And a failure to hold this level would signal a return to July’s $0.1950 low.

However, this bearish outlook is relevant, only whilst the Stellar Lumens price remains beneath the trend line at $0.3800. A close above this level would invalidate the bearish call and suggest XLM is breaking out to the upside.

Stellar Lumens Price Chart (daily)

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