Amid a general rally in altcoins during the past week or so, the medium-cap altcoin Stellar Lumens (XLM) has surprised the market with a dramatic 50%+ pump in price seemingly out of nowhere. And according to most all low timeframe (LTF) indicators, the rally is probably not over.
We start with a tight 2-hour XLM/USD chart, and see that XLM is consolidating around $0.80. The first major interruption to the altcoin’s rally came yesterday, with Bitcoin’s (BTC) dip which of course hit the prices of all altcoins (they all trade against Bitcoin).
We note a glowing RSI picture, with no bearish divergence off the highs and a hidden bullish divergence on price lows; this suggests a continuation in the uptrend. On the histogram, we see a dramatic expansion with very little contraction, reflecting the open-throttled moving averages fanning out and up.
Dramatic buy volume has not been followed by dramatic selling, and we see price here holding above the 9 exponential moving average (EMA) and briefly losing it. Closing below it would be understandable, and the 21 has not even been tested yet.
Comparing this to the 2-hour XLM/BTC pairing, we see on the latter an even more bullish picture. The indicators are all similarly strong on this chart (not pictured), and here we see what looks like an ascending triangle consolidation - a bullish pattern anticipating a break up.
What’s more, price on this chart has not even closed below the 9 EMA and only briefly pierced it. We do see a decent sell wick on this chart with considerable sell volume, which can perhaps be explained by a rapid flight back into BTC in order to buy that dip.
Finally, moving to a higher timeframe chart, we see that XLM is holding just within a historical support. It has completely left behind the moving averages, and may actually be a bit of a problem if the uptrend continues: price could start to overheat, and it would be healthier to rest here and let those EMAs catch up in order to support a more sustained uptrend.
We see a massive doji candle forming so far in the trading day; but although they often signal reversals, dojis also appear in the middle of strong trends.
The next serious resistance will start soon at $0.10. If the general rally in altcoins sustains, we could see XLM trade in a range between $0.08-10. Things certainly look good for this mid-cap altcoin.
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