Hi friends! Let's check out Stellar! Right away, I can see a common theme in the cryptos. They've bounced hard off of the lows, but many of them are approaching heavy overhead resistance. Enter Ripple! Just like many of the other cryptos in the market, XLM 0.51% has put in a V bottom, as it rallied off of yesterday's lows. Additionally, there has been a bullish crossover on the MACD , confirming a bullish shift in momentum. Traders shouldn't get too excited just yet though, because we aren't out of the woods yet. Looking at the chart, we can see that after the low was put in, XLM 0.51% cleared the 200 EMA (in purple,) defined it as support, and then rallied higher. Now, it's testing the bottom of the 50 EMA (in orange) and dancing around the 50 % retracement level. Currently on the chart, we can see that XRP has formed a small inverted hammer below the 50 EMA , which is a small sign of weakness. Additionally, we can see that volume has dropped well below average, indicating exhaustion in this push higher. Even if the 50 EMA is cleared, XLM 0.51% really needs to get out of this downtrend channel . The top of the downtrend channel , is the heavy overhead resistance that XLM 0.51% has to deal with. A failure to break above it, will entice the sellers to return for some more easy money. A sustained breakout above the falling parallel channel , will be a short-term victory for the bulls. However, (and this is very important, I want everyone to keep in mind that the breakout above the ascending broadening wedge pattern (blue dashes,) was a massive failure. Generally, ascending broadening wedge patterns are bearish , and they typically result in a break to the downside. I'm not saying that it's going to happen, I'm just saying that it's something to be aware of. Since the breakout failed, and XLM 0.51% dropped back into the ascending broadening wedge , it increases the likelihood of the whole pattern now breaking to the downside. If we can't get breakout of the top of this falling parallel channel , the odds of a breakdown from the wedge will increase even more. I will keep you posted, as the chart develops.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media! Good luck trading everyone. I'm out!
This information is not a recommendation to buy or sell. It is to be used for educational purposes only.
-MPC loves you-
-JD-
