Stellar (XLM/USD) has struggled to break the $0.2 resistance amidst the US dollar’s strength. This could be due to the triple bottom formed earlier, and a bearish trend may prevail if the market fails to break the resistance level.
The US dollar has surged during the summer, negatively impacting both equities and cryptocurrencies. Factors such as bond yields, oil prices and the Federal Reserve’s message have contributed to its strength.
To keep rallying above $0.2, the dollar needs to give up its summer gains. This could be through a decrease in bond yields, a consolidation or even a reversal in crude oil prices, or the Federal Reserve’s message.
If the market fails to break the resistance level, the price could fall back to the area where the triple bottom formed. In this case, support might not hold and a bearish trend could take over.
It is important to note that bearish market rallies are often violent and could lead traders to believe that a sharp reversal is in the cards. However, they are often nothing but short-lived spikes.
