Stellar Tests Critical Support as Institutional Adoption Accelerates Through WisdomTree Partnership
Market Pulse
- XLM bounces back from $0.217 monthly low after WisdomTree tokenized fund announcement on Stellar network
- Cross-border payroll expenses reduced by 25% via Airtm integration highlights utility potential
- Weekly EMA100 support holds despite 14.86% weekly loss
The question here is whether this fundamental catalyst can kick start a sustainable reversal from oversold territory, or if sellers will once again look to sell the rally.
| Metric | Value |
|---|---|
| Asset | STELLAR (XLM) |
| Current Price | $0.24 |
| Weekly Performance | 2.49% |
| Monthly Performance | -14.86% |
| RSI (Relative Strength Index) | 41.4 |
| ADX (Average Directional Index) | 31.0 |
| MACD (MACD Level) | -0.01 |
| CCI (Commodity Channel Index, 20-period) | -56.21 |
RSI at 41.40 Signals Oversold Relief Bounce After Testing August Lows
The relative strength index measures 41.40 on the daily timeframe and increased from distinctly oversold conditions comparable to readings in August’s capitulation phase. The rebound of the momentum oscillator from the low-30s indicates that the immediate selling pressure has likely subsided, with the WisdomTree news serving as the perfect technical bottom. RSI readings in early September were similar and a 40% rally transpired over the subsequent three weeks, but that advance had more substantial volume imprints than the present set-up.
Therefore, should depletion continue, ADA could get swept back down in a capitulation scenario. This would invalidate the bullish thesis and likely result in the low 20’s as the next target. Given the new launch of the platform, it does pose a risk if project fundamentals deteriorate. Price should always reflect the current state of development.
ADX at 30.99 Confirms Mature Downtrend Nearing Exhaustion Phase
The ADX line represents strong positive or negative trends depending on its direction. While the -DI and +DI lines measure downside and upside momentum, respectively. Most traders use ADX values of 25 or above to suggest that the price is trending, either up or down. A high ADX value could indicate the strength of the current trend upward or downward. The concept of dynamic overbought and oversold indicators can be applied directly to the ADX.
So, overall, the technicals point to an invaluable sentiment case study in the coming days courtesy of Airtm’s arrival to the Helium network. This will help determine the level of sentiment diminishing the bearish reaction which still has scope to break the 60-day lows; the same lows we have been base-building around near-term – potentially burying after this most recent benchmarking lower.
20-Day EMA at $0.245 Becomes First Resistance After Supporting October Rally
By the way the EMA is pointing downward a sunrise upward seems likely as there are no fresh highs. This suggests that XLM may rise to test this cluster in the coming days, although it’s unclear how heavy the resistance will be given the sharp rejection this area saw last time.
The fact that price bounced directly from the 200-day EMA at $0.221 during yesterday’s trial is a strong indicator that larger, longer-term buyers are protecting this vital support. The squeeze of the 200-day support and 20-day resistance has a $0.024 range at bay has the pressure cooker on final whistle, and any institutional inflows in the wake of adoption news this week will likely push price out of this range. The questioned former support zone at $0.245, is the red line that the bulls must take out on any recovery.
Support Holds at $0.217 While Resistance Stacks Between $0.245-$0.258
There are immediate resistance clusters between the 20-day EMA at $0.245 and the December breakdown point at $0.258, which sellers aggressively defended during three separate attempts last week. The monthly pivot at $0.262 adds another layer to this resistance stack. This is a formidable barrier that will require considerable volume to breach. The announcement of the WisdomTree partnership could be the spark needed, but technical traders will require confirmation with a daily close above $0.258.
Bulls are defending several support levels more resolutely, with the $0.217 monthly low six-time tested from the December drop. Yesterday’s bounce at the 200-day EMA of $0.221 was perfect, adding credence to this zone being critical support. The weekly EMA100 from analyst reports is approximately $0.210, thereby producing a triple-confluence support zone of $0.210-$0.221 that bulls not lose.
The current setup is highly reminiscent of a classic bottoming pattern in which negative developments are incapable of driving the price below readily apparent support, and favorable developments continually face resistance in breaking through… until that resistance gives way. Airtm’s cost reduction news and WisdomTree’s institutional adoption give fundamental reasons why the scales could tip to the bullish side. But, just the same, the technical structure must be taken at its word until it violates its boundaries. The intrusion of rising on-balance volume, reflecting accumulation at support, offers reason to think the smart money may be preparing for an upside resolution.
Bulls Need Daily Close Above $0.258 to Confirm Reversal Pattern
If the price can go back above $0.258 and stay that way at the end of the trading day, it would indicate a very bullish overall situation. In that case, it’s possible that the price could reach $0.295, taking into account the height of the current trading range. The solid institutional adoption news from WisdomTree is the fundamental reason for this, with cost savings of 25% through the Airtm platform also making a significant difference.
If Ripple loses the $0.31 support amid the general selloff, a quick drop to $0.2775 is likely. A strong bounce needs to quickly reclaim $0.31 to avoid a slide to $0.25. Should downside momentum prevail, the XRP/USD pair can plummet to $0.22.5.
Based on the monthly view, XLM has been in a downtrend since peaking at $0.617 in August. The consecutive monthly dojis and outside bars illustrate the consistent indecision and growing distribution that has plagued the entire altcoin market all year. With support at $0.258 failing to attract sufficient interest, XLM will need to carve out a secondary support level to base the next cyclical turn.
