Stellar Lumens (XLM) has shown impressive price movement over recent weeks, with a strong impulse wave peaking at $0.63 on November 24. However, the cryptocurrency has since entered a corrective phase, forming a descending wedge that suggests a potential breakout is on the horizon. This article examines the key factors driving XLM’s price action, including crucial support and resistance levels, as well as the likelihood of a bullish reversal.
XLM’s Strong Impulse Move and Correction
On the daily chart, XLM completed a 5-wave impulse move, reaching its yearly high of $0.63 before entering a correction. This correction has taken the form of a descending wedge, a structure often associated with bullish reversals. Price action is now consolidating near the $0.42 support level, signaling that XLM may be preparing for a breakout.
The descending wedge pattern shows lower highs and lower lows, with the price nearing the apex of the triangle. This compression in price action suggests that a breakout is increasingly likely as momentum builds. As XLM approaches this critical juncture, the Relative Strength Index (RSI) remains neutral, signaling a cooldown from overbought levels and increasing the likelihood of an upward shift in trend.
Breakout Targets and Resistance Levels
A breakout above the descending wedge resistance would signal the start of Wave (v), potentially pushing XLM toward higher resistance levels. The initial resistance lies near the $0.50 mark, followed by stronger levels around $0.60. If XLM breaks through these levels, it could test previous highs, potentially setting up for further bullish movement.
However, failure to maintain support around the $0.40 level could risk a deeper retracement. Traders should keep a close eye on this support level to gauge the strength of the price action.
Key Support and Resistance Levels to Watch
- Resistance: $0.44–$0.48 (Descending wedge upper boundary)
- Support: $0.40 (Critical support zone)
- Breakout Target: $0.50 and above, into Wave (v)
The RSI has shown minor bullish divergence, hinting at a potential upward move as momentum stabilizes. With key support near $0.40, the next few days could prove crucial in determining whether XLM will experience a significant breakout or extend its consolidation phase.
Also Read: Stellar Lumens (XLM) Primed for Explosive Gains: Analysts Predict a 360% Surge to $2.27
XLM Price Prediction
Stellar Lumens is in a critical consolidation phase, with a bullish breakout potentially on the horizon. As XLM approaches key support at $0.40 and resistance at $0.48, the likelihood of an upward trend increases. A successful breakout above the $0.50 resistance could set XLM on course for further gains, targeting higher levels in Wave (v). Traders should watch for a break above $0.48 for confirmation of renewed bullish momentum.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
