Stellar Lumens price has plunged, erasing some of the gains made last week and moving into a deep bear market. It has fallen by over 20% from its highest level this week as the recent rally took a breather. It was trading at $0.5075, up by 465% from its lowest level this month.
Stellar price mirrored that of Ripple
The recent Stellar Lumens price surge happened primarily because of the Ripple surge. Ripple price jumped sharply as investors predicted that the new Securities and Exchange Commission (SEC) will do away with its lawsuits on the company. Analysts believe that the XRP price will go parabolic once Gary Gensler is replaced.
The ongoing Stellar retreat is mostly because Bitcoin and other altcoins have retreated. After soaring to $99,600, Bitcoin has dropped to $95,000 as the path towards $100,000 stalls. Still, in the longer term, analysts believe that the coin will ultimately continue rising, with the move to $200k taking a shorter period than the rally to $100k.
Crypto analysts believe that the XLM price has more upside as the ongoing pullback is a normal part of the process. Historically, financial assets often retrace slightly even during the strongest rally. Dark Defender, a popular analyst believes that Stellar Lumens price will ultimately jump to $2.8, up by 460% from the current level.
The bullish case for Stellar is mostly based on the macro events, especially the Federal Reserve, which is expected to continue cutting interest rates. Also, a change in regulations will make it possible for companies to apply for Stellar ETFs as soon as in 2025.
Stellar is also being used by large companies like MoneyGram and Franklin Templeton, with more partnerships expected to come.
Is it safe to sell XLM tokens?
The long-term case for Stellar price is bullish. However, several reasons explain why it makes sense to take profits for now. First, the coin could go through mean reversion, a situation where an asset moves back to its mean price. In Stellar’s case, the 100-week moving average is at $0.1340, down by 73% from the coin’s price. This is a sign that a pullback makes sense.
Second, Stellar Lumens is extremely overbought, with the Relative Strength Index (RSI) moving to the extremely overbought level of 87. While this is a sign of a bullish momentum, it also indicates that the coin could retreat to exit the overbought zone.
Further, the ongoing retreat could push more traders to sell the rip as they take profits. Therefore, there is a likelihood that Stellar could drop to about $0.30 in the next few days.
Read more: Stellar Lumens Price Analysis: Can the XLM Crypto Double?
