A few weeks ago Stellar Lumens (XLM) was one of the most popular cryptocurrencies among traders, but right now it’s pretty calm. However, if we take a closer look at XLM/BTC chart we’ll spot an interesting trading opportunity. Buying Stellar Lumens can potentially make us 60% gain, so let’s see what the 4H chart says.
As you can see, the downtrend line (longer, blue line on the left) was broken on November 5. That means Stellar Lumens is ready to go higer against Bitcoin. XLM managed to climb to 566 satoshis after that and now is trading in the narrow range between the support at 477 and the resistance at 566 satoshis.
So, How to Trade This?
New trendline is formed (short blue line, marked as “Trendline”) and we’re now waiting for a breakout. We want to see XLM to pierce through the trendline, which would be a buy signal. Perfect time to buy XLM would be on a pullback after the breakout through the trendline.
Our stop loss should be below the support, let’s say at 450 satoshis or so. First target is the next “trouble zone” which XLM could face, so we should take some profits at 550-566 (18% profit).
Keep the rest of Stellar Lumens you bought for the next, big move which could happen. If XLM manage to break above the resistance at 566 it will have a lot of room for up, all the way to 765 satoshis where we should be our next target. If XLM reach our second target, that would be 60% profit.
So, right now it’s most important to watch for the trendline breakout and, of course, make sure to use stop loss if you decide to buy! Protecting your capital is always the most important goal for every trader.
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