Stellar (XLM) Price Analysis: Two Potential Scenarios for Future Price
Stellar (XLM) has declined since its annual peak in July, with its current trajectory approaching a significant long-term horizontal support level at $0.10. While the short-term descending resistance line has been breached, the cryptocurrency has struggled to maintain its upward momentum.
On the weekly timeframe, Stellar's price retreated following its peak at $0.1975 in July 2023, accompanied by a notable upper wick in the price chart. In August, the price closed on the $0.10 level, confirming this level as a crucial horizontal support zone.
Chart by TradingView
Despite a subsequent bounce, the price has struggled to sustain its upward trajectory and currently hovers 20% above the $0.10 horizontal support.
Can the uptrend resume?
The 50 Simple Moving Average (SMA) works well as a mobile support and resistance on XLM.
Currently, the XLM price is below 50 SMA, which makes the SMA currently work as a resistance. Therefore, the price will have to break through it before any uptrend can commence.
If Stellar resumes its prior upward movement, the next significant resistance lies at $0.235, representing a potential 100% increase in value.
However, the daily timeframe presents a more complex picture. Stellar experienced a bullish breakout from a descending resistance line on September 4, which sparked optimism for a substantial price surge.
However, this optimism was short-lived, as the cryptocurrency failed to reclaim the $0.130 horizontal area, validating it as resistance. The failure to sustain the breakout is seen as a bearish signal and casted doubt on its validity.
Bottom Line: The XLM price prediction remains uncertain. An ascent to the $0.130 resistance zone implies a 10% uptick, while a descent to the $0.110 support zone signifies a 9% decline. The cryptocurrency's future trajectory hinges on its ability to overcome these critical levels.
