The United States Securities & Exchange Commission’s (SEC) lawsuit against Ripple and XRP has moved from something that was supposed to be quick to a battle of attrition. The SEC served Ripple for selling unregistered securities on December 22, 2020, but the payments company has continued to make progress in the east, where it is welcomed.

While there seems to be no end in sight for this lawsuit, some speculate that Stellar, a strikingly similar cryptocurrency project, could be what the SEC  goes after next. XLM price continues to pull back from the highs it made on Saturday. There are growing concerns regarding its ability to maintain its present momentum. XLM price has a very bullish set up on its $0.01/3-box Point and Figure chart. When XLM hit the $0.42 price level, that was the breach of the dominant bear trend angle on the Point and Figure chart.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

XLM price also shows a bullish outlook as it forms a cup-and-handle on the weekly chart. This setup contains a rounding bottom known as the cup, often followed by a minor downswing called the handle, hence the namesake cup-and-handle.

This pattern forecasts a 1,830% upswing, obtained by measuring the distance between the right peak and bottom of the cup and adding it to a breakout point.

For XLM price, adding the 1,830% to $0.716 reveals a theoretical target at $13.78. Regardless of the optimism, if XLM price produces a lower low below $0.234, it will invalidate the bullish thesis and potentially trigger a further descent.

To invalidate the current bullish setup on the Point and Figure chart, bears will need to push XLM price a lot lower. The current price action suggests that a pullback to Senkou Span B and the Kijun-Sen is likely (both are within the $0.34 value area). Beyond that, bears would need to close XLM price below both the 38.2% Fibonacci retracement and the Cloud at $0.31 to return the market to a bearish outlook.

XLM/USD

Oct 20 2021