- Relative Strength Alert for Cryptocurrency Stellar
- Elrond Bullish RSI Divergence Calls For at Least $10 Rally
- The Only Ethereum Post-Merge Update You Need to Know
Stellar (XLM) is among the few cryptocurrencies holding back against the overall market weakness. Compared to the benchmark Altcoin index, the cryptocurrency XLM shows relative strength. The divergence between the XLM price and the Altcoin index is certainly a bullish signal.
XLM Relative Strength
The relative strength alert is showing up because XLM’s price made a higher low while, at the same time, the Altcoin index which tracks the overall market performance has printed a lower low. These points to the fact that XLM is stronger than the overall crypto market.
The relative strength signal often acts a leading indicator before a trend reversal.
We wrote a blog about the Relative Strength Index RSI here.
XLM Support Level
Since mid-May, the $0.10 big psychological level has been holding the downside as a strong support level. There were 4 tests of this support level, but each time the bulls came to the rescue.
In the short-term, if the bullish momentum persists, we can potentially retest the resistance area between the $0.130 and 0.138. A daily break and close above this resistance zone would open the door for a retest of the June high at around $0.158.
The Relative Strength Index (RSI) is sending mixed signals as it’s hovering near the 50 mid-level. This behavior shows that we’re still within a period of consolidation. In this regard, we can only expect a test of the consolidation’s top which lies around the $0.15 level.
What is Stellar XLM?
Stellar is a cryptocurrency that was created in 2014. The currency, denoted by the XLM symbol, is based on the Ripple protocol. It is intended to provide a decentralized platform for cross-border payments and has a built-in exchange. The Stellar network also offers a distributed ledger that is used to record financial transactions.
Elrond (EGLD) has printed a bullish RSI divergence that supports more upside, at least until the next resistance around the $63 level is retested again. Additionally, Elrond is showing relative strength compared to the overall cryptocurrency market. These two technical factors combined offer a short-term bullish outlook for the Elrond price.
What is Elrond?
Elrond is a blockchain platform that enables high throughput and low latency transactions. It uses a novel sharding approach that allows it to achieve scalability. Elrond has a native token, ESD, that is used to pay for transaction fees. The Elrond network is powered by nodes that are run by stakers. Stackers are rewarded with ESD for their participation.
Bullish RSI Divergence
A strong bullish divergence between EGLD and the Relative Strength Index (RSI) oscillator was seen at the bottom of the current range near the $47 support level. The rally that emerged afterward doesn’t seem to be running out of steam.
More, the price has developed the bullish RSI divergence in multiple time frames, indicating a potential bigger bounce.
The path of least resistance is to the upside as there are no clear resistance levels until the area between $63 and $65.
Ethereum transitioned from a proof-of-work (POW) model to a proof-of-stake (POS) model — better known as “The Merge.” The price of ETH has dropped over 25% since September 15, but what is more important in the long run is that the network’s issuance rate also plunged following the POS switch.
Ethereum Merge Update
The switch from POW to POS means that the miners have been replaced by validators that have staked ETH. This big change in the tokenomics of ETH triggered a nearly 95% drop in the ETH issuance rate. Essentially, the reduction in Ether’s supply made Ethereum much more deflationary.
Based on live statistics from ultrasound.modey, 10,894 ETH has been issued since the Merge (as of October 3, 2022).
By comparison, if the proof-of-work (POW) model was still running, the miners would have produced 223,738 ETH since September 15.
This shows that there has been a notable decrease in Ether’s supply, proving the theory that The Merge has a big deflationary effect.
The post-Merge stats also show that by taking into account both the upgrade EIP-1559 and the Merge, 603,000 new Ether per year will be produced compared to 4,931,000 new Ether with the old POW model.
As of today, Ethereum’s supply is at a current level of 122,629,383 ether, having a total tradable value of $158.00 billion.
As ETH becomes scarcer over time, this supply shock, combined with the future increased demand for the cryptocurrency, will support an increase in the ETH price over the long term.