Stellar Breakout Signals Strength as XLM Tests Key Resistance

Key Takeaways

• A descending wedge breakout suggests a potential bullish reversal.
• Fibonacci confluence highlights strong resistance near $0.365.
• RSI recovery signals strengthening momentum but requires confirmation.
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Stellar Lumens (XLM) is flashing signs of a potential bullish reversal after a prolonged downtrend, with technical indicators hinting at a shift in momentum.

On the 4-hour chart, XLM appears to have completed a complex corrective structure, while the 1-hour chart reveals key wave counts that could dictate its next move.

Is XLM on the verge of a breakout, or will hidden resistance levels snuff out the move?

XLM Price Analysis

By analyzing Fibonacci retracement levels, Elliott Wave patterns, and RSI momentum, we can pinpoint critical price levels and assess the likelihood of a breakout.

The 4-hour chart shows XLM’s prolonged correction, unfolding in a complex WXY pattern since its $0.64 high in November 2024.

The asset bottomed near $0.25, slightly below the 0.618 Fibonacci retracement level of the previous bull run. This level acted as a strong accumulation zone, leading to a breakout from a descending wedge pattern.

Since the March 11 low, XLM has been recovering and is now testing two key resistance levels—the descending resistance from the second structure and the 0.618 Fibonacci level.

Elliott Wave analysis suggests that XLM’s corrective phase may be over, with a new impulsive wave forming.

The breakout from the wedge aligns with the completion of wave Y, potentially marking the beginning of wave 1 in a bullish cycle.

However, for confirmation, a strong close above $0.30 is crucial, as this level has historically acted as a major supply zone.

The Relative Strength Index (RSI) has rebounded from oversold conditions and is approaching neutral territory, indicating renewed buyer interest.

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If XLM fails to break above the 0.5 Fibonacci level, a retest of lower support near $0.25 is possible.

On the other hand, if bullish momentum continues, the next target could be $0.42–$0.45, aligning with the 0.618 Fibonacci retracement level of the broader recovery.

XLM Price Prediction

The 1-hour chart provides a closer look at XLM’s short-term Elliott Wave structure, hinting at a potential five-wave impulse formation.

XLM recently completed wave (v) at $0.295 before entering a corrective phase. The ongoing pullback appears to follow an (a)-(b)-(c) retracement, with wave (b) attempting to reclaim the broken resistance trendline.

A bullish scenario could unfold if wave (c) completes near the 0.618 Fibonacci retracement at $0.253, where buyers might re-enter for another impulsive move.

The next upward wave could extend toward $0.32 (1.0 Fibonacci extension) and $0.365 (1.618 Fibonacci extension), aligning with higher time frame resistance.

However, if sellers push XLM below $0.253, a deeper retracement to $0.228 (full 1.0 Fibonacci retracement) could follow.

This would delay the bullish outlook and possibly invalidate the current wave count. A confirmed close above $0.295 would signal renewed bullish strength, potentially setting up a rally toward $0.365 and beyond.

The RSI on the 1-hour chart is neutral, showing no immediate signs of overbought or oversold conditions.

If the price retraces to $0.253 while the RSI stays above 40, it could present a strong buying opportunity for wave (iii) of the next bullish impulse.

XLM has broken out of its bearish trend, but holding key support levels is crucial for confirming a sustained bullish reversal.

Key Levels to Watch

• Immediate Resistance: $0.295 (previous wave (v) high).
• Key Resistance: $0.365 (1.618 Fibonacci extension).
• Critical Resistance: $0.423 (0.382 Fibonacci retracement of macro trend).
• Immediate Support: $0.253 (0.618 Fibonacci retracement).
• Critical Support: $0.228 (full 1.0 Fibonacci retracement).
• Short-Term Target for Wave (iii): Above $0.365 if momentum sustains.
• Invalidation Zone: Below $0.228, signaling further downside risk.