Stellar was trading inside a descending triangle pattern and has broken below support, likely leading to a downtrend of the same height as the formation. The triangle spans 0.28 to around 0.75, so the resulting selloff could last by this amount.
The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside or that bearish momentum is picking up. The gap is starting to widen, reflecting strengthening bearish pressure. These moving averages are also close to the triangle resistance, adding to its strength as a ceiling in the event of a pullback.
Stochastic is already in overbought territory, which means that sellers are getting exhausted. RSI is also in the oversold region, so bears might be looking to book profits at this point. Turning higher could draw buyers back in, possibly leading to a correction to the broken triangle support before more sellers join in.
The dollar managed to shrug off weaker than expected retail sales data as risk aversion remained in play. Cryptocurrencies have been reacting to sentiment lately and falling when risk-off vibes are present. There are no major reports lined up from the US economy today so sentiment could push the safe-haven currency around, along with riskier assets like Stellar.
Besides, the latest set of industry updates haven’t been too positive for altcoins. For one, the CFTC and SEC are stepping up their efforts to crackdown on potentially illegal activity, leading to speculations of possible exchange shutdowns. Another batch of negative reports could spur another wave lower for cryptocurrencies, including Stellar.