Stellar [XLM], at the time of writing, it was crossing near the lower boundary of its Bollinger Bands (BB) after a steep drop from its $ 0.119 resistance. A close below immediate support could result in prolonged losses in the next few sessions.
To trigger a near-term bullish recovery, the altcoin must find renewed buying pressure near the lower BB band. At press time, XLM was trading at $ 0.1064, down 3.3% in the past 24 hours.
4-hour XLM chart
Source: TradingView, XLM / USD
XLM moved back from the $ 0.13 resistance zone and plunged to find cooler lows in the past week.
The drop from the $ 0.119 level resulted in a loss of more than 12% in a single day on August 19th. But the bulls held the $ 0.16 threshold for nearly a month.
The BB baseline has limited most recovery attempts in the past week. With bears eager to find a convincing close below the $ 0.106 level, the alt could see a long downside.
In this case, the potential rebound target may be in the $ 0.104 -0.102 support range.
The next candlesticks would give more information on bearish intentions that could affect the trend in the near future.
An immediate recovery could directly hit the baseline in the $ 0.109 zone before a short-term reversal.
Furthermore, the alt may now see a compression phase following its recent volatile break, as evidenced by the BB.
Rationale
Source: TradingView, XLM / USD
The bearish RSI has settled on the threshold of the oversold region. A close below this level could prolong short-term losses before a likely recovery.
On the other hand, the Chaikin Money Flow (CMF) broke above zero after a bullish divergence with the price.
This reading has been geared towards the buyers and could cause a squeeze phase in the $ 0.104 -0.11 range.
However, the DMI lines revealed a bearish edge with a strong directional trend [ADX].
Conclusion
As the breakout of the bearish pennant fell below the $ 0.106 level along with the weak readings on the indicators, the altcoin could see a slow phase on the chart before an awakening.
The goals would remain the same as discussed.
Furthermore, investors / traders should take into account the broader market sentiment and developments on the chain to make a profitable move.