Stellar Lumens Analysis January 1, 2018
What a run it has been for Lumens buyers and believers of an efficient global fund transfer system. It is interesting because in a span of 6 weeks or so, prices surged and broke 3 key Fibonacci extension levels. It only stopped short of closing above the 4th level last week as buyers begun backing off as shown by the secondary chart.
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Momentum is fading and $0.31 is our immediate support. Other than the fading momentum, I cannot keep talking and emphasizing about the over-valuation of this token which is anyway expected given the rocket which took off after that break out above May’s highs in late November.
I will not recommend going long after that whole bear candlestick printed and closed above the BB last week but then again, if there is a close above $0.31, then we shall take it as a minor blemish in a perfect uptrend.
After all, figuring out tops is price action responsibility and once there is a trickle down, we shall see it from the chart.
More often than not strong surges like those seen on December 22 is followed by a period of consolidation and volatility damping.
In the daily chart, we can see that being replicated with the middle BB acting as a very strong support line as it has been in the last 2 months or so.
Now, following that XLM over-valuation, we shall only rely on price action for direction and specifically focus on how prices react at the middle BB. If bears get the upper hand then sellers can target $0.11, a potential 50% price drop.
