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Stellar Lumens (XLM) are nearing the end of a bullish trend that has been in place for almost 18 months. A bullish reversal is possible if the situation is resolved favourably.
Stellar, developed by the Stellar Development Foundation, is a distributed ledger system. TASCOMBANK, the largest commercial bank in Ukraine, has completed a trial using the Stellar network. For its part, it has advocated for implementing blockchain technology to revamp Ukraine’s financial infrastructure.
Stellar Reclaims Resistance
Since reaching a peak of $0.798 in May 2021, the Stellar price has fallen inside a declining wedge pattern. There is bullish potential in a falling wedge formation. This means that it almost always results in breaks.
The ascending wedge is only one of the positive indicators. Although Stellar’s price fell below the $0.084 support zone at the start of December, it recovered after hitting the wedge’s support line and turning back up. Regaining lost ground is bullish since it invalidates the prior collapse. For the time being, the XLM price is trading at a critical resistance level.
XLM trades at $0.088. Source: TradingView
Assuming a breakout takes place, the next resistance is at $0.13. Conversely, if the XLM price drops below the $0.084 level, it might head toward $0.062 soon.
Though the weekly RSI trends upwards, it has not yet formed a positive divergence. This means that indicator analyses do not confirm the reclaim and bullish pattern.
Short-Term Stellar Price Breakout
Stellar Lumens’ price fell below a falling resistance line on January 10. A peak of $0.090 was recorded on January 14 as its pace of growth quickened. The peak validated the resistance area at $0.09.
However, a bearish divergence has formed over the previous 24 hours on the six-hour RSI, suggesting a possible continuation of the negative trend. In such a case, the rising support line at $0.084 would be a potential bottom for the XLM price.
The digital currency’s growth rate may quicken if it exceeds $0.090. That would eventually lead to a breakaway from the long-term declining wedge.
In conclusion, the most plausible Stellar price projection is a pullback in the short term followed by a breakout from the long-term descending wedge. Confirming the bullish trend over the long term would come with a breakout from the wedge. However, a break below the rising support line in the short term would indicate that the trend remains bearish.