- Cryptocurrencies sell-off accelerated
- XLMUSD under pressure at one year lows
- XLMUSD solid long term out
The broader cryptocurrency industry is yet again under pressure after a recent bounce back from one-month lows. Leading the slide lower are Bitcoin and Ethereum, which have dropped below key levels owing to renewed sell-off in the market.
XLMUSD technical analysis
Stellar Lumens is another crypto that has not been spared, edging lower in continuation of a sell-off wave that began May of last year, after peaking to highs of $0.80. While the coin has been in consolidation mode since mid-last year, renewed sell-off has gathered pace in 2022.
XLMUSD has dropped to one-year lows of $0.18 and looks increasingly bearish and susceptible to further losses. In the short term, the $0.16 level is the immediate support above which XLMUSD remains well supported for a potential bounce back.
A drop followed by a close below the $0.16 mark could give short sellers a reason to ramp up the sell-off and fuel a drop to lows of $0.10. With XLMUSD trading below the 65 EMA and 200 EMA, the bearish bias remains in full play. Additionally, the Relative Strength Index is also signaling an increased sell-off. A reading of below 50 often signals short sellers in control.
Going by the deep pull-back XLMUSD bull case will only come into play on price rallying and finding support above the $0.20 psychological level. Below this key level, XLMUSD remains susceptible to further losses.
Why XLMUSD could bounce back
While Stellar Lumen has taken a significant hit over the past year, the future is not all doomed. Its future is looking increasingly bright as its prospects are not hampered by the philosophical flaw that has hampered many altcoins.
The limited degree of practical use among most cryptocurrencies has been one of the reasons why most have struggled. For many cryptocurrencies to succeed, there must be sufficient merchants accepting it as a mode of payment, and there need to be many people willing to use it as a mode of payment.
In contrast, Stellar Lumens was not set up with an eye for payments in the retail landscape. Instead, it was set up to lure organizations and cross-border payments. Its blockchain has proved to be highly effective in supporting and enabling cost-effective, cross-border business.
Since its inception in 2014, the Stellar Lumens blockchain has enabled more than 450 million transactions, mostly made up of cross-border payments. Cross-border payments are becoming a hit on the Stellar Lumens blockchain partly because they’re extremely cheap and only take minutes rather than days.
At the heart of the fast and cost-effective cross-border payments are the Lumen token and the corresponding blockchain. The fact that Stellar works with any currency, fiat and otherwise, is another reason it has continued to attract strong interest.
The Stellar platform is already attracting strong interest from some of the biggest brands, given its edge in enabling fast and cost-effective transactions. International Business Machines has already partnered with the platform to offer clients cross-border payment solutions. MoneyGram, Liquidity Mortgage, and Knabu Bank are some of the other high-profile brands working with Stellar.
XLMUSD short term outlook
While the future is bright, XLMUSD could remain under pressure in the short term due to a number of factors. There is no doubt that the overall industry is under correction after powering to record highs last year. A risk-off mood appears to have cropped, all but fuelling a correction lower affecting XLMUSD sentiments in the market.
However, suggestions that many Russian citizens are turning to cryptocurrencies as a store value amid the ongoing standoff with Ukraine should continue to offer support which could see the likes of Stellar Lumen edging higher.