Stellar Lumens (XLM) Bulls Face TD Sequential Sell Signal

The cryptocurrency market has been abuzz with Stellar Lumens (XLM) showing strong recovery momentum after hitting a bottom. However, the well-respected TD Sequential indicator is now flashing a sell signal on the 4-hour chart, raising concerns about a potential retracement. Traders and analysts alike are closely monitoring this development, as it could signify an impending shift in XLM’s short-term trend.

The TD Sequential is a widely-used technical analysis tool developed by Tom DeMark, designed to identify potential trend exhaustion and upcoming price reversals. It consists of two main phases: the setup phase (which consists of nine consecutive candles closing higher or lower than four candles before) and the countdown phase (which follows with 13 additional bars indicating the continuation of a trend before exhaustion occurs).

When the TD Sequential indicator prints a “9” signal, it suggests that the asset has reached a point of possible reversal. Conversely, if it reaches the “13” count in the countdown phase, it typically signals the exhaustion of the ongoing trend. In the case of Stellar (XLM), the recent sell signal on the 4-hour timeframe implies that bullish momentum may be fading, leading to increased caution among traders.

The emergence of a TD Sequential sell signal often translates into a potential price correction or consolidation phase. Given the recent bullish momentum in Stellar’s price action, traders might begin to take profits, which could trigger a pullback. Historically, $XLM has exhibited strong reactions to such technical signals, making this development particularly noteworthy.

Additionally, external market factors such as Bitcoin’s price movement, macroeconomic events, and liquidity conditions across the crypto space could influence Stellar’s price trajectory. If broader market sentiment remains positive, the sell signal may lead to consolidation rather than a full-fledged reversal.

To navigate this situation, traders should closely observe crucial technical levels:

Immediate Support: If selling pressure intensifies, $XLM could test the support zone near $0.115 to $0.120, which has previously acted as a strong demand area.

Resistance Levels: On the upside, Stellar faces resistance near $0.135 to $0.140. A decisive break above this range could invalidate the sell signal and push the asset toward new highs.

Emily’s reaction—