Stellar could be in for a rally as it formed an inverted head and shoulders pattern on its 1-hour chart. Price is currently testing the neckline and a break higher could send it up by roughly the same height as the chart formation, which spans 0.2100 to 0.2500. Holding as resistance, on the other hand, could force a move back to the lows.
The 100 SMA is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. In other words, the neckline resistance is more likely to break than to hold. However, the gap between the moving averages has narrowed to reflect weaker bullish momentum.
Stochastic is also dipping into the overbought zone to signal that buyers are feeling exhausted and might let sellers take over. Bearish pressure could pick up once the oscillator starts moving south. RSI, on the other hand, is still heading north so Stellar might follow suit. This oscillator has plenty of ground to cover before hitting overbought levels.
Stellar drew strong support from Tensortask’s plans to build on Stellar’s blockchain, creating an artificial intelligence market in a program that is part of the Google cloud startup program. Tensortask is part of UChicago’s Polsky Center for entrepreneurship and innovation, working on the AI project for the past five months and planning to open source their code within four months to take it from private alpha to beta.
Another major boost was the announcement made by Coinsuper, which is a HongKong-based cryptocurrency exchange, about making XLM available and listing it on its platform.
Apart from that, its move towards asset tokenization will also likely make a strong contribution to the growth of the Stellar blockchain, thereby keeping price supported. After all, this could later on attract more attention from retail and institutional investors, which could further stoke demand.