Hello traders,
Context
XLMUSD has been consolidating gains for about two and a half weeks since the local high set on June 4th. Now, XLMUSD seems to be on the verge of breaking out of the downtrend that has constricted price action since the local high. An inverse head and shoulders pattern may also be forming on the daily chart that could help propel XLM to ~$0.81. The neckline of this pattern is at around $0.072. Additionally, XLM seems to have completed an ascending broadening wedge pattern where the breakdown took it right near the target of the pattern, all the way to ~$0.65. Also, the price maintained well above the 200D SMA during this fall. These additional factors give further credibility to the idea that the downtrend is over.
Technical Indicators
First, let's analyze the indicators on the 1D chart. Here, we can see a breakout from a descending trend on the RSI. On the MACD, the 12 period MACD is slightly below 0 although the 26 period MACD has held above 0. The difference between these seems to have maximized, indicating a potential uptrend and cross soon.
4H chart below:
On the 4H chart, the RSI has initiated an uptrend since the 11th of June, and the MACD has been below 0 since slightly before then. This divergence, and the longevity of the MACD below 0 during an uptrend seems to indicate upside is imminent.
1W chart below:
Finally, from a more long term perspective it is important to note XLMUSD has successfully broken out of a multi-year downtrend and remained out of this falling channel. The MACD has only just crossed above 0 after a prolonged time below 0 and the RSI is trending upwards. If XLMUSD can break above $0.09, where a triple top has been formed - threatening the bullish trend -, XLMUSD has the potential to nearly double in price in the coming months.
Context
XLMUSD has been consolidating gains for about two and a half weeks since the local high set on June 4th. Now, XLMUSD seems to be on the verge of breaking out of the downtrend that has constricted price action since the local high. An inverse head and shoulders pattern may also be forming on the daily chart that could help propel XLM to ~$0.81. The neckline of this pattern is at around $0.072. Additionally, XLM seems to have completed an ascending broadening wedge pattern where the breakdown took it right near the target of the pattern, all the way to ~$0.65. Also, the price maintained well above the 200D SMA during this fall. These additional factors give further credibility to the idea that the downtrend is over.
Technical Indicators
First, let's analyze the indicators on the 1D chart. Here, we can see a breakout from a descending trend on the RSI. On the MACD, the 12 period MACD is slightly below 0 although the 26 period MACD has held above 0. The difference between these seems to have maximized, indicating a potential uptrend and cross soon.
4H chart below:
On the 4H chart, the RSI has initiated an uptrend since the 11th of June, and the MACD has been below 0 since slightly before then. This divergence, and the longevity of the MACD below 0 during an uptrend seems to indicate upside is imminent.
1W chart below: