Since mid-August, Stellar’s native token, XLM, has been caught in a pricing range, creating a playing field for swing traders. The volatility within this range has provided both gains and losses for traders, depending on their timing and strategy. The question now is whether the range-low can ease Stellar’s retracement, particularly in light of the upcoming Federal Reserve decision on September 20.
Stellar’s Range-Bound Journey
Over the past few weeks, Stellar’s XLM has exhibited a consistent pattern of gains and losses within a defined range. In the first week of September, a rebound from the range-low of $0.11 to the range-high of $0.13 delivered an impressive 18% return for bullish traders. However, the subsequent retracement from the range-high could potentially offer sellers a 15% gain, should it hit the range-low.
Historically, the range-low of $0.11 has been staunchly defended by XLM bulls. This figure aligns closely with the weekly bullish order block (OB) of $0.095 – $0.109. The previous two retests of the range-low successfully hit the range-high, suggesting a possible repeat of this pattern.
Impact of the Federal Reserve Decision
With the Federal Reserve’s decision looming on September 20, market players are watching closely. A favourable announcement could trigger a rebound at the range-low, pushing XLM to target the mid or range-high. If XLM manages to surge above the confluence of the range-high and the H12 bearish OB of near $0.13, bullish traders could extend their gains to $0.14.
However, any further pullback beyond the range-low could potentially ease Stellar’s retracement and the weekly bullish OB. The current state of the Relative Strength Index (RSI) and the Chaikin Money Flow (CMF) suggest a stagnation of buying pressure and capital inflows respectively.
Futures Market and Stellar
Looking at the futures market data, there appears to be a bearish tilt. Open Interest rates have dropped by approximately $10 million between September 9 and 17, signalling a decline in demand for XLM in the derivative segment. Excessively negative funding rates during this period further tipped the balance in favour of sellers.
The Accumulative Swing Index (ASI), which gauges the strength of price swings, has taken a downturn and turned negative, reinforcing a strong downtrend. Given these indicators, a retest of the range-low seems likely, offering potential relief for bulls.
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