Stellar bulls can’t seem to catch a break as the digital asset has plunged once again, an 8% loss so far today and a total loss of the daily uptrend. Not everything is bad news for XLM though as the bullish trading volume has been far higher than the current bearish trading volume.
Additionally, the longer-term timeframes are still favoring the bulls over the bears but that could change soon if bulls lose an important weekly support level.
XLM is currently testing the weekly 12-period EMA located at $0.06189 and acting as an important support level. The last time the Bulls lost this support level was back in June 2019. The loss of the 12-period EMA led XLM into a huge weekly downtrend that took the digital asset from $0.1188 down to $0.0421. It is clearly an important support level and the bulls are defending it but not as strong as they would have hoped.
Stellar’s Long-Term Outlook Isn’t Great
Even if the bulls can defend the weekly 12-period EMA, the long-term for XLM will still look quite dull as the monthly chart is in a significant downtrend and doesn’t look like it’s going to change any time soon.
The bears are currently forming a bearish reversal candlestick here after getting rejected from the 12-period EMA. The outlook is definitely not good and the bulls would need to at least set a higher low compared to $0.0421.
XLM’s weekly chart is still favoring the bulls and it’s in an uptrend. The bulls are looking for continuation after a bounce off the 12-period EMA after seeing increasing bull volume and a nice break above both EMAs.
The daily chart could, however, remain in a downtrend for an extended period of time although we should be able to see a nice bounce when the RSI touches 30 or perhaps even sooner. The bearish volume over the past few days hasn’t been too convincing but still managed to make XLM lose 28% of its value over the past 12 days.