Stellar (XLM) Forms Bull Flag Pattern With Technicals Pointing to More Upside

Key Takeaways

• XLM broke out of a long-term descending wedge.
• Wave (iv) may end with a breakout from the bullish flag likely.
• The next resistance lies at $0.319 and $0.357.

Stellar (XLM) has shown a significant trend shift following its breakout from a descending wedge structure. 

The daily chart confirms the completion of a major corrective phase, while the 4-hour chart presents a clean impulsive structure now completing wave (iv). 

Current price action suggests XLM is poised for another leg upward, provided support holds and momentum returns. 

XLM Price Analysis

On the daily chart, XLM broke out of a broad descending wedge that had defined the price action since its peak at $0.639 on Nov. 24.

The descending wedge breakout from April 12 at $0.24 was initiated after a WXY correction bottomed at $0.20 on April 7.

The corrective structure is now complete, confirmed by the WXY double zigzag and a firm breakout above the $0.266 support, which coincides with the 0.786 Fibonacci retracement level.

The breakout was supported by a clear uptick in the daily Relative Strength Index (RSI), which has risen from oversold territory to the neutral zone, indicating a trend reversal.

Fibonacci retracement levels suggest that a move to $0.319 (0.618 Fib) and then $0.357 (0.5 Fib) could be next, provided XLM confirms a breakout with a daily close above $0.297 (swing high).

The price is now consolidating just above this reclaimed support, creating a higher low structure, an essential signal for the beginning of a larger bullish cycle.

Longer-term resistance is at $0.44 (0.236 Fib of the full move down from $0.639), which would confirm the trend reversal fully.

However, failure to hold above $0.266 would risk a deeper retest of the wedge breakout or even a drop toward $0.20; until then, the structure strongly favors the bulls.

XLM Price Prediction

On the 4-hour chart, XLM clearly forms a five-wave impulse from its local low at $0.20. 

Waves (i), (ii), and (iii) are complete, and wave (iv) appears to be nearing completion as a bullish flag or falling wedge structure, typically a continuation pattern.

The correction is finding support at $0.266, which aligns with the 0.786 Fib and the prior breakout levels, reinforcing its strength. 

If this support holds and RSI maintains current levels without diving into oversold, wave (v) is likely to initiate soon.

Targets for wave (v) based on Fibonacci extensions are $0.319 (0.618 extension) and potentially $0.357 (0.5 extension), a decisive move above $0.297 would signal this launch. 

RSI is cooling off from previous highs, which provides room for upside without being overbought.

Invalidation of this wave count occurs below $0.266; if that breaks, XLM may revisit $0.24 or consolidate further before the next leg. 

However, the current structure favors continuation toward $0.319 and above.

Key Levels to Watch

• Major Support: $0.266 (0.786 Fib), $0.24 (previous base), $0.20 (macro low)
• Immediate Resistance: $0.297 (swing high), $0.319 (0.618 Fib)
• Breakout Confirmation: Move above $0.297
• Invalidation Level: Drop below $0.266 breaks impulsive count