Is Stellar Lumens (XLM) About To Pump Again?

Is Stellar Lumens (XLM) About To Pump Again?

Stellar Lumens (XLM) is trading in a similar falling wedge that we have recently spotted on Bitcoin (BTC) and Ethereum (ETH). However, in the case of XLM/USD, this falling wedge has the potential to lead to a much more aggressive breakout that could see the price rally all the way towards the $0.0625 mark before it resumes its downtrend. It will be very unlikely for Stellar (XLM) to make a decisive break past the 200 moving average but we could definitely see another pump similar to what we saw towards the end of last year. This would inflict serious pain on the bears trying to short sell Stellar (XLM) on futures exchanges.

Recently, we have seen more and more exchanges foray into futures trading. The vast majority of traders still don’t understand the risks associated with futures trading or margin trading both of which are gateways to the use of high leverage. Unfortunately, most traders only see it as a means to play with more capital than they have without any proper risk management as we saw just recently in the case of Matic Network (MATIC). The cryptocurrency crashed hard losing more than 70% of its value which inflicted some serious pain on most leverage traders. The takeaway from that incident is to use leverage as effectively as possible with proper risk management. In the case of Stellar (XLM) it is likely that we might see a pump to the upside but it is also likely that we might see a decline below the falling wedge. Until and unless we have a break out of the falling wedge, there is no reason to enter any bullish positions.

The 4H chart for Altcoin Dominance (Others.D) warns us of the risks of being bullish on altcoins without confirmation. We can see that Altcoin Dominance (Others.D) is still struggling to break past the 6.73 level. So far, it appears to have rallied past 6.65 but things could soon go south if it declines down to the 6.39 level and eventually below that. If we have a decisive break past the 6.73 level, that would be a signal to be bullish on the altcoin market.

Stellar Lumens (XLM) is a large cap coin but it could still make close to a 30% move in case of a bullish breakout. This means that medium and small cap coins could rally much higher in case of a potential move to the upside. The 4H chart for Altcoin Dominance (Others.D) shows that there is not much upside to expect here and we are now at a decision point. A break past the 6.73 level would mean the beginning of a new bullish cycle which is very improbable at this point. This is why it is likely that we might see yet another pump in Stellar Lumens (XLM) near term but it is unlikely to have any follow through and might soon lead to a strong downtrend.

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