The crypto market continues to bleed and different cryptos are hitting prices that were unimaginable a couple of months ago. Stellar, for instance, is now trading at under 10 cents. This is a level that no one would have expected, with all the positive developments that Stellar has made this year. From a partnership with IBM to the growth of stellar-based security tokens, there are so many factors that would supposedly be supporting Stellar (XLM)’s price, but they have not. This is an indicator that bearish sentiment is so strong, that at this point, fundamentals don’t matter that much. With such heavy bearish sentiment, what’s are Stellar’s prospects? Is there any chance of a reversal any time soon?
With bearish sentiment heavily weighing down on the market, the point of reversal will come when fear hits a peak. The market has to get to a point of maximum fear, a point at which, very few people want to play. At that point, selling volumes will start to hit a floor.
One way to gauge this is to watch tether (USDT). Over the last few weeks, Tether has been rising up market cap rankings and now ranks 4th. This is a good indicator that fear is on the rise. Investors believe that the market could be going lower much further, hencethe need to seek safety in stable coins. Therefore, for a crypto like Stellar (XLM), which has broken a significant psychological support at $0.10, this could leadto even more fear, and could see it possibly slide lower.
Essentially, the market is now at a point where newcomers in the market are sitting on the sidelines, waiting for further drops, hence denying the market of much-needed volumes to stabilize prices. On the other end of the spectrum, are those who are deep in losses, having bought dips all through the year. Such investors no longer have fiat to support the market, by buying more or are getting skeptical of continuously throwing money at the market. A combination of all these factors could drive Stellar (XLM) and mostother cryptos lower.
However, there is hope. As tether continues to rise up market cap rankings, it can act as a perfect barometer of market sentiment. For instance, in a scenario where tether breaks into the top 2, it would be a clear indicator that the market is at a point of maximum fear.
This is a point of lowest faith in the market. A point where both bulls and bears are afraid. It would be a point where bulls are afraid that the marketcould be headed lower, while bears are afraid that the market could be close tothe bottom and could reverse at any time. Therefore, with tether at number 4,the point of maximum fear may be close, but it’s still a little further down.
Interestingly, between this level and a possible nearby bottom, it is a good point for those who believe in the tech to take long positions. That’s because, the drop is all sentimentdriven. A crypto like stellar is technically sound and is constantly working on getting more attractive in the market. This explains its growing rate of adoption in spite of the bear market.