Stellar (XLM) recently made headlines with an impressive surge, gaining more than 300% over the last 30 days. However, the momentum seems to have slowed in the past week, as XLM faces a slight 3% drop, signaling a shift in market sentiment. Currently trading at $0.4879, XLM is at a crossroads. While recent social metrics have weakened and bearish sentiment has taken hold, two bullish patterns are emerging that could propel XLM toward the $0.90 mark if they play out.
Stellar eyes $0.90: 2 bullish patterns set the stage for rallyhttps://t.co/HYEvirQNMO
— John Morgan (@johnmorganFL) December 8, 2024
Two Bullish Patterns Spark Hope
The rapid rise of XLM, which outperformed many top cryptocurrencies last month, has caught the attention of both investors and analysts. Despite the recent pullback, which many attribute to the market’s natural cycles, two key bullish patterns are forming that could signal a potential recovery.
One of the most prominent patterns is the symmetrical triangle that formed in November. XLM has been consolidating within this pattern, which typically indicates that the cryptocurrency is preparing for a breakout. With resistance looming near the upper boundary of the triangle, a successful breakout could push XLM’s price toward $0.90 in the near future.
The second bullish signal is a falling wedge formation on the Relative Strength Index (RSI) chart. The RSI, which has long been used by traders to gauge momentum, recently broke above the wedge, signaling an uptick in strength for XLM. This technical indicator suggests that if XLM continues to follow this trend and clears resistance, a significant price movement could follow.
Mixed Investor Sentiment and Market Signals
While the bullish patterns provide optimism, the investor data tells a more complex story. According to Hyblock Capital data, there has been an increase in buying activity during the recent dip, indicating that some investors are seizing the opportunity to accumulate at lower prices. This has resulted in a boost in buying volume, which could suggest that a recovery is on the horizon.
However, caution is warranted. The long/short ratio has sharply decreased, signaling an increase in short positions. This shift suggests a lack of investor confidence and may signal further price declines if the trend continues. Additionally, MA Cross indicators show a bearish crossover, with the 21-day moving average and the 9-day moving average converging. This pattern could lead to more downward pressure, with $0.43 potentially serving as a key support level.
Will XLM Reach $0.90?
For XLM to continue its upward trajectory, it needs to break through the critical $0.56 resistance level. If this occurs, the cryptocurrency could see renewed bullish momentum, bringing the $0.90 target within reach. However, if the market fails to gain confidence and the bearish signals continue, XLM may face further consolidation or even a dip to lower levels. Investors will be closely watching the next few days to see how XLM reacts to these technical levels and whether the bullish patterns can materialize into a breakout.
In conclusion, while XLM faces challenges in the short term, the technical indicators suggest that a bullish reversal could be on the horizon. The journey to $0.90 depends on overcoming key resistance levels and maintaining the upward momentum that has fueled its recent rise.
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.
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