Stellar (XLM/USD) faces resistance at $0.20, struggles to break through.
Strength in the US dollar is contributing to Stellar’s recent weakness.
The triple bottom support area may not hold if the market reaches that level.
Stellar (XLM/USD) has encountered strong resistance at the $0.20 level, as the US dollar’s recent strength puts pressure on cryptocurrency prices. This resistance comes after Stellar experienced a bounce to $0.20 during the summer, which appeared to be a reaction to the formation of a triple bottom pattern. However, this bounce proved to be a short-lived spike in an overall bearish trend.
Bearish market rallies can be misleading, often luring traders into thinking that a sharp reversal is imminent. However, these rallies are typically short-lived spikes.
Stellar’s Uphill Battle: US Dollar Strength Pressures XLM/USD at $0.20 Resistance
- For Stellar to sustain a rally above $0.20, it would likely require a weakening of the US dollar. This could happen in various ways:
- Bond Yields: If bond yields decrease and bond prices rise, it could lead to a reduction in the demand for US dollars. The recent bond market sell-off contributed to the dollar’s strength.
- Crude Oil Prices: A consolidation or reversal in crude oil prices could also impact the dollar’s strength. The significant rally in oil prices during the summer triggered lower equity prices, resulting in a stronger dollar.
- Federal Reserve: The messaging from the Federal Reserve plays a crucial role. While no rate cuts are expected in the near future, the central bank’s stance and policies can influence the dollar’s performance.
In the context of Stellar’s current situation, its inability to break above the $0.20 resistance level may lead the price back to the support area where the triple bottom pattern formed. However, there is uncertainty about whether this support will hold if tested.
Overall, Stellar’s performance is closely tied to the strength of the US dollar, and any sustained rally in XLM/USD would likely require a change in the dollar’s fortunes.