Stellar (XLM) has seen a period of recovery after going off the cliff at the start of April. However, after hitting a high of around $0.24, XLM has gone through a serious correction. As a result, the coin is facing a lot of downward pressure. Here are some takeaways:
Despite the recent sell-off, XLM is still holding the crucial $0.18 support.
Any fall below $0.18 could precipitate a decisive downtrend in the near term.
The coin is however looking strong and could push further upwards.
Data Source: Tradingview
Stellar (XLM) – The downside risks
The current downtrend that we have seen with XLM is slowing. Even though the coin has lost around 5% over the last 24 hours, there is enough to suggest that any further decline is not on the horizon. But the key for XLM bulls would be to make sure that the price action stays well above $0.18.
In the past few weeks, this price has proved to be a strong support zone. If bulls are however not able to hold it, we could see XLM spiral into a much-prolonged downtrend. In the end, the coin may hit its March lows of $0.16 before it tries to find any upward momentum.
But even with these downside risks, it is important to note that the upward potential for XLM still remains very uncertain. As of now, $0.24 remains the upward cap. Even if the coin rallies in the days ahead, it is unlikely to cross $0.24 anytime soon.
Is Stellar a decent buy today?
From a short-term point of view, it would be best to monitor XLM till Monday and see if it manages to maintain $0.18. If this happens, then you can enter and exit right before $0.24. But if the coin falls below $0.18, you must give it a week or so for the price to bottom before you buy.