Stellar Lumens (XLMUSD) Technical Analysis: Heading for Descending Triangle Bottom

Stellar Lumens has formed lower highs and found support around 0.2400 to create a descending triangle formation. Price just bounced off the triangle top and looks due for a test of support.

The 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside. In other words, support is more likely to hold than to break or resistance is more likely to break than to hold. The 100 SMA lines up with the triangle top to add to its strength as a ceiling. A break below support could also find some buying pressure at the 200 SMA dynamic inflection point.

Stochastic is moving south so Stellar Lumens could follow suit while sellers have the upper hand. It has plenty of room to slide before hitting oversold levels so bearish pressure could stay in play for longer. RSI is heading south also, indicating that bears are in control. This oscillator is nearing oversold levels and turning back up could bring buyers in.

Cryptocurrencies appear to be on shaky footing these days as the IMF warned of the dangers in its World Economic Outlook:

“Cybersecurity breaches and cyber attacks on critical financial infrastructure represent an additional source of risk because they could undermine cross-border payment systems and disrupt the flow of goods and services. Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.”

Furthermore, the IMF also noted the role of regulation:

“An indiscriminate rollback of post-crisis regulatory reform and oversight—both domestically and internationally—could encourage excessive risk-taking, leading to a further buildup of financial vulnerabilities.”

The IMF also downgraded global growth forecasts, adding to factors weighing on overall risk sentiment. This typically discourages traders from buying or holding on to riskier assets like Stellar Lumens and its fellow altcoins.

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