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- XLM has rebounded from the $0.40 support and is retesting a four-year resistance line.
- Momentum indicators suggest a bullish breakout is possible, with a target near $0.61.
- Holding above $0.40 keeps the long-term outlook positive despite short-term uncertainty.
Stellar (XLM) has been trading under a falling resistance line since its all-time high in May 2021, with multiple failed breakout attempts. The latest rejection came in July, leading to a three-week decline. However, last week saw a rebound from the $0.40 horizontal support level, where XLM formed a bullish engulfing candlestick, halting the downtrend.
Now, the price is once again testing the long-term resistance. Whether XLM can break above this level will be pivotal in determining the direction of its next major trend.
Momentum Supports Bullish Case
Technical indicators are tilting in the bulls’ favor. On the weekly chart, the Relative Strength Index (RSI) has moved above the neutral 50 mark, and the Moving Average Convergence Divergence (MACD) remains in positive territory.
The current Elliott Wave count suggests XLM may have completed a wave four correction on August 3, setting the stage for wave five, with a potential target near $0.61 — just above the long-term resistance. A decisive breakout from this four-year trendline could spark a strong rally rather than a small uptick.
Short-Term Outlook Remains Unclear
Despite the bullish medium-term setup, the short-term charts present mixed signals. On lower timeframes, XLM is trading within a descending parallel channel, typically a corrective pattern, while also completing an upward A-B-C structure.
Also Read: Breaking: Stellar’s ERC-3643 Partnership May Unlock Tokenized Asset Trading for Pi Network
If Stellar holds above $0.40, the long-term outlook stays positive. However, a failure to break resistance in the coming weeks could delay the rally and keep the price range-bound.
The Road Ahead for XLM
The next few weeks will be crucial for Stellar. A confirmed breakout above the multi-year resistance could attract fresh buying interest and potentially push XLM toward new highs in 2025. Until then, traders should watch the $0.40 support and the descending resistance line as key decision points.
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
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
