Stellar begins correcting, tests $.50 structure
At the beginning of the new year, we saw Stellar make an incredible rally towards the holy land of $1! Much like Ripple, we saw incredible growth in a matter of days and, due to the unfortunate news of Coinbase denying rumors of adding Ripple, a steep downfall for a correction. In the case of Stellar, we saw price test the $.50 cent area twice, creating a nice demand zone and a possible reaction point for buyers. However, along with the support structure we saw a steep trend line that indicated strong bearish momentum - tested at multiple points.
Price tested zone between $.50 and $.60 cents on 2 separate occasions, creating a nice demand zone using the wicks
Price Rallys back towards the promise land!
Eventually, we saw that price broke below the $.50 cent support and really began to scare bullish investors, as the next reaction point would be somewhere in the $.40 cent range. However, price finally broke the trend line, and with strong momentum was able to break the supply zone and reach new daily highs.
Lesson to be Learned: Although you may see a strong demand zone and price bounce of a little, beware of trendlines that have been formed, as a strong trend line can indicate that there is enough momentum for price to break the zone, as seen in this case.
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As price broke the demand zone and continued to follow the trend line, eventually we see a break in both structures caused by a strong rally
Overall, unless major news is announced - its safe to say that price will be leveling out between $.60-.$.80 and create a possible channel. Wait for price to break out of the $.80 resistance area in order to confirm true bullish bias. After that, all roads lead to $1!
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