XLM price is showing signs of a breakout from a bullish pattern that could kick-start a massive upswing. However, Stellar needs to clear significant barriers before it embarks on the journey. Failure to do so will delay the rally and, in some cases, even invalidate the bullish thesis.
XLM price has set up roughly three higher highs and four lower lows since August 13. Drawing a trend line that connects these swing points reveals the formation of a falling wedge pattern. This technical setup has a bullish bias and forecasts a 17% upswing, obtained by measuring the distance between the first swing high and low. Adding this distance to the breakout point at $0.354 reveals a target of $0.416.
However, a significant chunk of resistance lies around $0.393. Clearing this barrier will confirm the start of an uptrend and propel XLM to $0.416 or the resistance level at $0.430.
A decisive 4-hour candlestick close above $0.430 will open the path to $0.468, constituting a roughly 40% upswing from the current position.
Regardless of the bullish outlook, if XLM price fails to hold above the rising wedge’s upper trend line, it may indicate that the current breakout was a fake upswing. In such a case, Stellar might retrace to retest the lower trend line of the falling wedge or the support level at $0.338.
While the buyers are likely to make a comeback at $0.338, failing to hold above $0.315 will disprove the bullish thesis.
This move might also trigger a 13% crash to $0.272.
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