Stellar (XLM) has shown a remarkable turnaround after the recent market crash. However, following the announcement of the CPI report and related fears of an interest rate hike, a sell-off occurred.
The Doncian channel indicates that the average price of XLM as of this writing is $0.1076. After the drop, the amazing indicator gives very strong bullish signals.
This may indicate a restoration. The XLM market has shown a remarkable recovery from the September 13 crash, pushing the price above the $0.1004 support line that marked the fall from August 14 to September 6.
At the 4-hour time mark, the coin is following an improvement. Looking at the bigger picture, however, we see that the turnaround may be short-lived.
Stellar Rally gives investors some confidence
The XLM token closely tracks Bitcoin’s price movements because the entire cryptocurrency market is modeled by it. The downward pressure of the triangle indicates that the coin is moving in a downward direction.
Support and resistance price levels are calculated using the Fibonacci retracement tool. The bulls are trying to exploit two supports at $0.1023 and $0.1058.
These two factors strengthened the optimism of traders and investors and contributed to the price increase.
The $0.1153 range represents a resistance level. If price momentum overcomes this resistance, the price may rise to the $0.1234 range. This can be a strong buy signal for investors and traders.
An explosion indicator also shows bullishness. In addition to buying signals, moving averages are currently sending out buy signals. However, for the market to recover, bulls will need to continue to push past the $0.1194 and $0.1234 resistance levels.
Increasing interest rate to determine the price of XLM
Even for the broader cryptocurrency market, this can be a challenging issue. As mentioned earlier, XLM and other cryptocurrencies in the market share a strong correlation with Bitcoin, which inversely tracks the S&P 500 index.
In light of this, XLM’s mini-rally could be disrupted if major financial markets continue to fear an impending rate hike. XLM price is struggling to break above the barrier level of $0.1153.
From the 10th to the 13th of September, the coin tested the aforementioned resistance level. The coin is trading with a resistance level of $0.1153 at the time of writing.
Long candlesticks on the charts may indicate another attempt to break out of the trading range. If the price falls again, it should not breach the $0.1023 support level, as doing so could trigger a large selloff.
XLM total market cap at $2.8 billion on the daily chart | Source: TradingView.com Featured image from Zipmex, Chart: TradingView.com (The analysis represents the author's personal views and should not be construed as investment advice).