Stellar (XLM) Price Aims for 60% Upside Move - Bullish Breakout on the Horizon?

The price of Stellar (XLM) has been experiencing a downward trend since reaching its peak for the year on July 13.

However, it is currently trading within a continuation pattern, suggesting the potential for a significant price increase in the future.

Overall Trend Remains Bullish

An analysis of the price action and wave count further supports the notion that the overall trend remains bullish, indicating the possibility of XLM reaching a new yearly high in the near future.

On the weekly time frame, there are important developments to consider.

XLM broke out from a 616-day descending resistance line in January, followed by an upward movement that accelerated in June. Though it cleared the $0.10 horizontal resistance area, it fell short of reaching the next resistance at $0.25, resulting in a high of $0.195 and a subsequent decline.

Currently, XLM is trading around $0.14, gradually approaching the $0.125 support area. The Relative Strength Index (RSI) on the weekly chart provides a mixed signal, indicating an undetermined trend.

According to the Elliott Wave theory, XLM's price is likely in the fourth wave of a five-wave upward movement, taking the form of a triangle pattern. If this analysis is accurate, it suggests that XLM has already reached a local low and is in the process of validating the triangle's support line.

As a result, a breakout from the triangle pattern is anticipated, with the price potentially rising toward the next resistance level at $0.25, representing a 60% increase from the current price.

Bottom Line: Overall, the technical analysis indicates that Stellar (XLM) is at a critical juncture, with a bullish breakout possible but a bearish trend looming if certain support levels are breached.

XLMUSDT chart by TradingView