Stellar: Unraveling the effects of this trendline resistance for XLM traders

ambcrypto.com:

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

Stellar [XLM], at press time, entered into a long-term squeeze near the Point of Control (POC, red). The recent drawdowns have reaffirmed the bearish narrative while the price struggles to topple the 20 EMA (red).

Any above the three-month trendline resistance would position the alt for a near-term upside. But the bulls needed to inflict an uptick in the buying volumes to invalidate the current bearish tendencies. At the time of writing, XLM traded at $0.11349.

Source: TradingView, XLM/USD

This bearish pull from the $0.2 marked a three-month trendline resistance (white, dashed) on its daily chart. The alt lost over 58% (from its April highs) and hit its 19-month low on 18 June.

This trendline resistance alongside the 20 EMA has kept a check on the buying pressure over the last few months. Despite the recent bearish invalidation, the bears have not given the buyers a free hand to alter the trend.

Should the bears continue to ramp up their pressure, they could aim to retest the POC level in the $0.105 zone. A close below this level could expose XLM to a downside toward the $0.098-zone.

If the buyers find renewed pressure, the 50 EMA could subdue the buying efforts. To heighten the chances of this trajectory, the buyers needed to find a close above the trend line resistance.

Source: TradingView, XLM/USD

The Relative Strength Index (RSI) has taken a bearish stance over the last few days. The midline resistance has slowed down the near-term buying efforts on the chart.

Furthermore, the accumulation/distribution’s higher peaks over the last two weeks marked a bearish divergence with the price action.