Trade Recommendation: Stellar Lumens
Stellar Lumens (XLM/BTC) may be a laggard among its large cap peers. While Litecoin (LTC/BTC), Ethereum (ETH/BTC), and Ripple (XRP/BTC) have already established a short-term bottom and have pumped, Stellar Lumens still appears to be extremely bearish. However, the price action over the last few days makes us believe that the market may be ripe for bottom picking.
Technical analysis shows that XLM/BTC may be carving a bottom around support of 0.000027. This view comes as the market appears to be at the apex of a falling wedge on the daily chart. With the market not going too far below 0.000027, Stellar Lumens is in a good position to take out the diagonal resistance.
In addition, Stellar Lumens is printing a bullish divergence on the daily RSI. This divergence becomes more prominent if you switch to the 4-hour chart. This tells us that bulls are starting to gather momentum even though the price keeps dropping.
Also, yesterday’s volume uptick tells us that bottom-pickers and bargain hunters are heavily buying at current levels. With the RSI in oversold territory, the expected selling relief should help the market bounce soon.
The strategy is to buy at current levels of just below 0.000027. As long as Stellar Lumens doesn’t drop too far below this level, it will likely rally to our targets of 0.0000358 and 0.0000425.
The process may take less than a month.
Daily Chart of Stellar Lumens/Bitcoin on Binance
As of this writing, the Stellar Lumens/Bitcoin pair is trading at 0.00002677 on Binance.
Summary of Strategy
Targets: 0.0000358 and 0.0000425.
Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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