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Stellar (XLM) Spikes 13% as Price Bounces From Crucial Support Zone

Published
Nikola Lazic
Published
By Nikola Lazic
Edited by Ryan James

Key Takeaways

  • Bullish breakout from a descending wedge pattern.
  • Critical resistance at $0.45–$0.50, limiting upward momentum.
  • Elliott Wave count suggests a possible new impulsive wave.

Stellar (XLM) recently showed strong bullish momentum, breaking out from a descending wedge pattern.

However, the price faces resistance near key horizontal levels, indicating a potential short-term consolidation before the next major move.

XLM Price Analysis

The daily chart of XLM shows a significant breakout from a descending wedge, pushing the price from a low of $0.32 on Dec. 30 to a recent high of $0.51.

This movement aligns with a bullish Relative Strength Index (RSI) recovery, suggesting strong buying interest.

However, the RSI approached overbought conditions, so we saw another downturn. 

XLM price analysis
XLMUSD breakout from descending wedge | Credit: Nikola Lazic/TradingView 

From an Elliott Wave perspective, the structure indicates that XLM completed a five-wave impulse, followed by a corrective ABCDE pattern.

This correction bottomed out near the $0.32 level in late December, leading to upward movement. If this count holds, XLM is likely in the early stages of a new impulsive wave.

Despite the breakout, XLM faces a strong horizontal resistance zone at $0.45–$0.50, historically a major supply area.

A successful close above this range would confirm further upside potential, while failure to do so may result in a retest of key support levels around $0.40.

Interacting with the horizontal support zone on Jan 30 resulted in a 13% upward spike. This could be an early sign of the development of a new uptrend, but further confirmation is needed. 

XLM Price Prediction

The one-hour chart provides a more detailed outlook, highlighting XLM’s current wave structure and Fibonacci projections.

The recent breakout is part of a developing five-wave impulse, with Wave 3 potentially reaching the 1.618 Fibonacci extension at $0.62.

If the momentum continues, a full extension could push Wave 5 toward the $0.70 area targets.

XLM price prediction
XLMUSD developing five-wave impulse | Credit: Nikola Lazic/TradingView 

However, a corrective pullback (Wave 4) may unfold before this happens, targeting support levels around $0.457.

These areas align with the previous high made in November, and the price will likely face resistance at this level again before it can continue moving up. 

If XLM holds above $0.40, the bullish outlook remains intact. A decisive move beyond $0.50 would likely confirm an extended rally toward the next major resistance levels at $0.57 and beyond.

On the downside, failure to hold key support could lead to deeper retracements, possibly testing the $0.38 or $0.343 levels.

Key Levels to Watch

  • Immediate Resistance: $0.50 (structural resistance and psychological level)
  • Major Resistance: $0.57, $0.62 (1.618 Fibonacci extension)
  • Immediate Support: $0.457 (previous high and likely Wave 4 retracement)
  • Key Support: $0.40 (critical level to maintain bullish momentum)
  • Critical Support: $0.38 (61.8% Fibonacci retracement), $0.343 (38.2% Fibonacci retracement)
Disclaimer: The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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Nikola Lazic

Nikola Lazic is a cryptocurrency analyst and investor working in the industry since 2017. He holds a bachelor's degree in Sociology, which enables him to better understand the psychology behind the crowd´s positioning. Consequently his preferred analytical tool is Elliott Wave Theory in combination with price action analysis. Combining his experience in trading and investing with knowledge in content writing he strives to bring the most accurate and actionable information. Expertise: Cryptocurrencies, Technical analysis, Elliott Wave Theory, On-chain metrics, Research reports.
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