Stellar has formed lower highs and lower lows on its 1-hour time frame, moving inside a descending channel pattern. Price is bouncing off support and might be due for another test of resistance.
RSI is pulling out of the oversold territory to signal a return in bullish momentum. This could be enough to take Stellar up to the nearby pullback zones marked by the Fibonacci retracement tool.
Price is currently testing the 38.2% retracement level at 0.3516 but could be due for a higher correction to the mid-channel area of interest closer to the 50% Fib. A larger pullback could last until the top of the channel and 61.8% Fib at 0.3625.
The 100 SMA is below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. Also, the gap between the moving averages is widening to signal strengthening bearish momentum. The 100 SMA coincides with the channel resistance to add to its strength as a ceiling as well.
The fork in Stellar has been one of the main factors causing the decline. Netanel Lev, the Vice President of Research and Development at the Kin Ecosystem Foundation, said that Kin needs to be scaled as Stellar suffers business scale issues.
Ted Livingston, Founder, and CEO of Kin and Kik, in a statement, said:
“Most crypto projects to date have been technology-driven first and product-driven second. Kin has always been the opposite. After working heads down alongside the best minds in the industry we came to the conclusion that a hybrid solution of Ethereum and our own fork of Stellar would benefit the Kin Ecosystem both short and long-term.”
With that, Kin would still feature bidirectional blockchain support but consumer-facing applications will utilize the proprietary Kin network instead of Stellar.
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