Stellar (XLM) had dropped significantly from its £0.10 resistance and was seen close to the lower edge of its Bollinger Bands (BB) at press time. A close below the immediate support could cause sessions to start off with major losses.
XLM needs to experience fresh buying pressure at this point in order to spark a near-term bull revival. At the time of writing, the altcoin was trading at £0.090, down 3.3% over the previous day.
In the last week, XLM reversed course from the £0.11 resistance area and fell sharply to establish new lows.
The drop from £0.10 resulted in a loss of more than 12% on August 19. However, the bulls have maintained the £0.14-floor for almost a month.
The majority of recovery attempts over the past week have been hampered by the BB’s base line. The asset could extend the decline because bears are after a convincing close below the £0.90-mark.
If the bears succeed in that, the support level between £0.088 and £0.087 could represent the potential rebounding target.
The following few candlesticks would reveal further information about the bearish intents that could soon be influencing the trend.
Before a brief reversal, an immediate recovery could run straight into the basis line in the £0.093-zone.
The BB also suggests that XLM could be entering a squeeze phase following its most recent dramatic break.
The bearish RSI was bordering the oversold territory. Before an expected comeback, a close below this level could increase near-term losses.
Meanwhile, following a bullish divergence with the price, the CMF sped above the zero level.
This signal was heavily in favour of buyers with potential to lead to a compression phase between £0.088 and £0.094.
However, the DMI lines showed a strong directional trend (ADX) and a bearish edge.
The weak readings on the indicators and the bearish pennant breach going below the £0.09 level could mean a sluggish phase for XML before a rebound.
The aforementioned targets would apply.