Market Overview: Stellar/Yen (XLMJPY) on 2025-10-10

• Stellar/Yen (XLMJPY) traded in a volatile 24-hour range between 55.87 and 58.96, closing at 56.16 with notable bearish reversal signs.
• Momentum indicators signal oversold conditions, with RSI dipping to 25 and MACD showing negative divergence.
• Price tested a key support zone near 56.0, with volume surging at the lower end of the Bollinger Bands.
• A major bullish engulfing pattern emerged during the overnight hours, followed by a sharp breakdown into lower liquidity zones.
• Turnover spiked near ¥9778.3 million at the session’s close, coinciding with a breakdown below 57.50, a critical prior support level.

Price Action and Volatility

Stellar/Yen (XLMJPY) opened at 57.31 on October 9 at 16:00 ET and surged to a session high of 58.96 before retreating sharply into the early hours of October 10. The pair closed at 56.16, marking a bearish reversal from a late bullish engulfing pattern formed during the 02:30–02:45 ET window. Volatility expanded significantly in the final hours of the session, with Bollinger Bands widening as price dropped below the 15-minute and daily 50-period moving averages. The market appears to be consolidating below a major support line that coincided with the 56.50–56.47 range.

Moving Averages and Momentum

The 15-minute chart shows price closing below both the 20-period (57.58) and 50-period (57.62) moving averages, confirming a bearish bias. On the daily chart, price broke beneath the 50-period MA (57.82) and approaches the 100-period MA (57.96) as potential short-term support. RSI reached a low of 25, suggesting oversold conditions, while MACD turned negative with a bearish divergence from the price low. This divergence suggests traders should be cautious about short-term bounce potential.

Volume, Turnover, and Key Levels

Volume spiked sharply during the last 1.5 hours of the session, with the largest bar at 563.6 at 15:45 ET, coinciding with a breakdown to 56.3. Total volume for the 24-hour period was 183,242.0, while turnover reached ¥9778.3 million, indicating strong conviction in the bearish move. The breakdown below 57.50 appears confirmed, with no immediate signs of a counter-move. Key support levels to watch include 56.47, 55.99, and the Fibonacci 61.8% retracement at 56.2, which aligns closely with the 56.3 level.

Backtest Hypothesis

A potential backtesting strategy could involve a short trade triggered by a breakdown of the 50-period MA (57.62) on the 15-minute chart, with a stop-loss placed above the 58.15 resistance level. A target could be set near 55.99, which aligns with both a Fibonacci 78.6% retracement and a recent pivot point. This strategy would benefit from a bearish divergence in MACD and RSI, as seen in the final hours. A trailing stop could be placed at each swing low, with the risk of a rapid reversal if the price reclaims the 57.50 level. This approach leverages both momentum and structural support/resistance, with high conviction signaled by the volume profile in the final phase.