Will Stellar escape the clutches of the 200 DMA?

The XLM price has been grinding alongside the 200-DMA for almost two weeks, struggling to build the bullish momentum needed to breakout. Stellar Lumens (XLM) is trading at $0.374 (+0.49%), +34% in October, and +190% year-to-date. XLM has a market cap just north of $9 billion, ranking it. the24th most valuable crypto asset behind VeChain (VET).

Despite a slew of positive news flow surrounding Stellar Lumens, the XLM token is stuck in a rut. Although the price has recovered well from the September lows, Stellar is less than half the price it was in May and over 65% below its 2018 all-time high. The price action is surprising considering the recent news that the Canadian Central Bank (BoC) has announced it will use the Stellar Network to develop the nation’s Central Bank Digital Currency (CBDC). Nonetheless, investors have shunned XLM in favour of glossier projects like Solana (SOL) and Fantom (FTM) in the second altcoin season this year. As a result, Stellar’s price action is lethargic and will remain so until it pulls free from the 200 DMA and clears the September high.

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Stellar Lumens Price Forecast

The daily chart shows the XLM price is above the 50 DMA at $0.331 and the 100 at $0.327. However, Stellar is glued to the longer-term 200-day average at $0.371. Furthermore, the Relative Strength Index (RSI) is rolling over which suggests bearish momentum is growing. Taking that into consideration, it’s likely that XLM will lose the support of the 200 DMA and slide to the concise averages below. As long as the price holds above the 100-day it’s in with a chance of recovery. However, below $0.327 a trip to $0.255 looks probable. On the other hand, a bullish scenario emerges if the price clears the September high at $0.439. In that event, a run to $0.500 is likely. For now, it’s unclear which scenario will play out. On that basis, I maintain a neutral stance until the technicals provide a clear sign.

XLM Price Chart (Daily)

XLM price

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