After reaching a peak end of July, major cryptocurrencies reversed back in August with Stellar Lumens (XLM-X) leading the drops.
In the past 7 days, XLM/USD dropped over 19%, going back inside the daily Ichimoku cloud, and approaching the $0.21 support level. While the future cloud appears bullish, the Tenkan line is just about to cross below the Kijun line.
This happened after the crypto/fiat pair reached and tested the 61% Fibonacci retracement level of 0.35 towards the end of July. With this, we can see a formation of lower highs in the cryptocurrency since it hit an all-time-high level of 0.88 back in January. Each time it’s surged, it’s peaked at a lower level than the previous surge. And all the peaks have fallen on key Fibonacci resistance levels. This is noteworthy because it shows traditional technical analysis can make sense in the cryptocurrency market.
With that, as we have been expecting, the market’s trading volume could go lower and the prices could fall before the beginning of 2019. That can essentially be the calm before the storm, when the interest in the industry could restore among market players, and we could start seeing investing opportunities we’ve been waiting for again.
Other major cryptocurrencies such as Bitcoin have formed similar chart patterns, with BTC/USD dropping back below the $7,000 psychological level on Monday.
