- XLM price is down 10.9% and could fall another 12% as markets temporarily reverse their trend.
- Denelle Dixon, CEO of the Stellar Development Foundation, has concerns about the change to the Wyden-Toomey-Lummis infrastructure agreement.
- Investors can expect the downtrend to reverse by $ 0.251.
The XLM price saw a massive sell-off after several sell signals broke out on August 8th. The initial downturn broke a critical level of support, indicating a further decline.
Wyden-Toomey-Lummis infrastructure deal and chaos that followed
The law in question was sponsored by Sens. Ron Wyden (D-Ore.), Pat Toomey (R-Pa.) And Cynthia Lummis (R-Wyo.) And is designed to support innovations around the burgeoning cryptocurrency space. However, the alternative amendment proposed by Sens. Portman, Mark Warner (D-Va.) And the White House regards miners, validators or hardware wallet providers as “brokers” and requires them to submit transactions to the Internal Revenue Service (IRS) Report to.
Denelle Dixon, CEO of the Stellar Development Fund (SDF), used Twitter to voice her opinion that blockchain innovations in the US should support “smart legislation and accountability that make sense.” She added
We agree with industry leaders that brokers such as crypto exchanges should comply with reporting requirements. But it just doesn’t make sense to define a Stellar network node or a validator as a broker, for example. Validators have no customers, do not execute trades, and there is a lack of reportable information.
While the bill supports cryptocurrency innovation and keeps the US at the forefront, industry insiders, including the recently introduced change, will seriously stifle growth and discourage startups.
XLM price increases lower
XLM price rose a total of 58% in about 18 days between July 20 and August 8. While a similar surge has been seen in the cryptocurrency landscape, things have taken a turn when the major cryptocurrency declines.
For Stellar, the Momentum Reversal Indicator (MRI) flashed a sell-signal in the form of a red ‘one’ candle on the 6-hour chart, signaling the exhaustion of the uptrend. This technical pattern predicts a one-to-four candlestick correction.
Therefore, investors can expect the decline seen so far to widen by 10%. The first level of support the bears will encounter is at $ 0.262. While XLM price could consolidate here, a break would push it down to $ 0.251, a 12% correction from its current position.
Given the sideways move around $ 0.251 upfront, market participants can expect this support floor to prevent further sell-offs.
XLM / USDT 6-hour chart
Regardless of the bearish outlook, XLM price could quickly turn if it reclaims $ 0.286. This move would suggest buyers are back. Another move that quickly leads to a crucial 6-hour candlestick close above the August 8 swing high at $ 0.314 will invalidate the bearish thesis.
If bullish momentum continues to pour in after this spike, the Stellar price could hit the resistance level at $ 0.331.