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The price of $XLM pulls back after a 609% surge, retesting critical Fibonacci levels. Will the rally continue toward $0.71, or is there a deeper correction ahead?
With the broader market witnessing a pullback, the Crypto Fear and Greed Index has dropped by 3.66% to 79. Despite the overall market remaining firmly in the ‘greed‘ zone, the pullback phase has caused a slight pause in the ongoing altcoin rally.
Stellar ($XLM) witnesses a similar halt to the massive bull run and loses the psychological mark of $0.50. Will this pullback undermine the ongoing rally in the $XLM price trend? Let’s find out.
$XLM Rally Peaks at 600% Gain
In the weekly chart, the surge in $XLM has resulted in three massive bullish and gulfing candles. The Stellar bull run began in early November with a 19% surge. It gained momentum in the second week with an impressive 81% jump. The rally topped in the third week with a staggering 175% rise.
Considering the opening and highest prices during the bull run, it extended from $0.090 to $0.63, resulting in a massive surge of 609% in just three weeks.
However, the higher price rejection quickly pulled the price down, and last week’s closing price settled at $0.5365.
With the bullish exhaustion kicking in this week, $XLM has dropped by 8.12% and lost the $0.50 psychological mark. Currently, it is retesting the 61.80% Fibonacci level at $0.4666 with a lower price rejection and is trading at $0.4932.
4-Hour Pennant Signals Hopes of a Prolonged Rally
On the shorter-term 4-hour chart, a bullish pennant is forming. The lower price rejection from the 61.80% Fibonacci level signals a strong demand area.
However, constant rejection from the overhead resistance line is keeping bullish growth in check. The RSI line shows no bullish divergence to support a double-bottom reversal and is inching closer to the halfway line.
Considering the weakness in the RSI and the pullback phase, the price could retest the 50% Fibonacci level at $0.3909. To provide additional support, the 50 EMA line is near this Fibonacci level.
On the flip side, a bullish continuation would face the next resistance level at $0.71.