Stellar (XLM) Holds $0.32 Support, but Resistance Threatens Recovery

• XLM price has been trading within a descending channel since December highs.
• The token holds support at $0.32, but overhead resistance lies at $0.37 and $0.49.
• XLM price is likely to continue trading sideways as momentum remains muted.

After experiencing a 20% decrease in the 30 days, Stellar’s (XLM) price has finally found support at $0.32. Typically, this support is supposed to offer a potential foundation for a rebound.

However, multiple resistance levels stand in the way of a full recovery, threatening to stall bullish momentum. With this in play, what could be next for XLM price?

XLM Finds Temporary Stability

XLM was among the cryptocurrencies that performed well during the last quarter of 2024. On Dec. 6, the altcoin’s value was $0.56.

But as the year ended, the token struggled to hold on to those gains. As a result, its price fell to $0.34.

While XLM’s price bounced again in January, the last few weeks have been challenging for the token as it failed to build on the rebound to $0.50.

This decrease led to the formation of a descending triangle. A descending triangle indicates a bearish outlook as it shows that demand for an asset is weak.

As a result, the upper trendline forms higher lows with horizontal support, which could break down and lead to a further crash.

However, despite the decline, support at $0.32 seems to be holding strong. At the same time, the Chaikin Money Flow (CMF) reading, which is in the negative region, shows that the Stellar token might not experience a quick rebound.

Furthermore, overhead resistance exists at $0.37 and $0.49. At these levels, XLM experienced pullback.

As such, buying pressure needs to be intense to surpass these points. However, since the CMF shows weak buying pressure, XLM’s price is unlikely to rally.

XLM Price to Stick to Sideways Movement

XLM’s technical setup on the 4-hour timeframe also appears similar to that of the daily chart. According to the image below, the position of the Ichimoku Cloud confirms the resistance XLM faces.

Typically, the Ichimoku Cloud is an indicator that measures resistance, support, and trend. When the cloud is below the price, it indicates support.

But when it is above the price, it signifies resistance. The cloud is above XLM’s price, and the major resistance is around $0.37.

In addition, the Moving Average Convergence Divergence (MACD) is around the neutral signal line. This indicates neither bearish nor bullish momentum around the token.

If this remains the same, XLM’s price might keep hovering between $0.30 and $0.35. On the other hand, if the momentum becomes bearish, the altcoin’s value might plunge to $0.26.

But if demand for the token surged, as it did in Q4 2024, the price might bounce, with targets starting from $0.42.