The Stellar Lumens price is down 30% so far in June and now approaching a major area of support. Can XLM hold here, or is more pain ahead for bulls?
Stellar is last trading at $3.0600, lower by $0.01262 (-3.90%).
XLM started the month firmly in the recovery camp. Stellar had bounced well from the May $0.2742 low. By the 1st of June, XLM had not only reclaimed $0.4000 but looked likely to stretch even higher.
Bitcoin’s weakness derailed the rebound in Altcoins at the start of this month. However, after El-Salvador’s announcement to make it legal tender, BTC has since caught a bid. Alts have not tracked Bitcoin’s 20% rally, and most have firmly dislocated from the market leader.
XLM is a prime example, and the Stellar Lumens price momentum remains negative. The low trading volume further underlines the lack of investor enthusiasm.
Nonetheless, it’s not all bad. And while there may be some near-term price pressure, Stellar’s fundamentals remain strong.
Firstly, let’s not forget that XLM is up 150% in 2021 and outperformed most traditional assets by a long, long way.
Stellar’s market cap is just north of $7 billion. This time last year, it was around $1.6 billion. Its valuation has increased by 440% over the last 12 months. This is serious progress.
Stellar Lumens directly competes with Ripple (XRP) in the global remittance space. Ripple is currently the subject of a Securities and Exchange Commission lawsuit that claims Ripple engaged in an unlicensed securities offering when it began selling XRP in 2013.
Ripples’ possible pain, may therefore be XLM’s potential gain.
Looking at the daily chart, we can see that the Stellar Lumens price approaches major trend line support at $0.2965.
I would consider the trend from the start of this year to be a key level to watch in the short term. If XLM fails to hold this support, it becomes vulnerable to an extension lower.
An obvious target would be the 27th of May low at $0.2742 low. Beyond that, the Nov 2020 high and late Jan low’s around $0.2300 look possible.
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