Following a period of significant price surges, Stellar [XLM] encountered bearish pressure. Nevertheless, the token’s price chart displayed several optimistic patterns. If a breakout occurs successfully, XLM could target $0.90 next.
Emerging Bullish Patterns for Stellar
Over the past 30 days, XLM demonstrated remarkable growth, surpassing many top cryptocurrencies. Specifically, the token’s value surged by over 300% within that timeframe.
However, the upward trend shifted in the last seven days, resulting in a minor 3% price decline for XLM. At the current moment, XLM was exchanging hands at $0.4879.
The recent price dip had adverse effects on Stellar’s social metrics. Notably, XLM’s Social Dominance declined, suggesting a decrease in the token’s popularity.
Furthermore, its Weighted Sentiment witnessed a sharp drop — an indication of increasing bearish sentiment. Despite this, Stellar’s trading volume plummeted alongside its price, hinting at potential bullish reversal signals.
Renowned crypto analyst Javon Marks recently highlighted two bullish patterns visible on Stellar’s charts. The first pattern was a bullish symmetrical triangle that emerged in November.
XLM’s price consolidation occurred within this pattern, with current indications pointing towards an approach to the pattern’s resistance level.
As for the second pattern, a falling wedge formation was observed on the token’s Relative Strength Index (RSI) chart. Fortunately, the RSI broke through the bullish pattern.
If XLM maintains a similar trajectory and achieves a breakout, the token could aim for $0.90 in the upcoming days.
Is XLM on the Verge of a Breakout?
Data from Hyblock Capital revealed that although XLM experienced a corrective decline, investors seized the opportunity to buy the dip. Buying volumes for the token surged on multiple occasions recently.
An increase in this metric typically indicates heightened buying activity within a specific token’s market.
Nonetheless, not all signals favored XLM. For instance, the long/short ratio noted a significant decrease, signaling an increase in short positions within the market — often indicating reduced investor confidence in an asset.
The MA Cross indicators also hinted at a possible bearish crossover, evidenced by the diminishing gap between the 21-day MA and the 9-day MA.
If XLM’s descent persists, it could potentially find support at $0.43. However, for a bullish trend reversal, Stellar must surpass the $0.56 resistance level to sustain the rally.