Can XLM Prevent a Breakdown? | Credit: Hameem Sarwar
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Key Takeaways
Stellar’s (XLM) price has crashed below the $0.39 support area.
The trend remains bearish as long as XLM fails to reclaim this support.
Can the XLM price regain momentum and mount a reversal above it?
Stellar (XLM) had one of its most bearish weeks last week, breaking down from the $0.39 horizontal support area.
Adding to the breakdown, momentum indicators and the price action warn that more downside awaits.
Still, a bullish count in play suggests XLM could reverse soon.
Bulls need to step in this week to invalidate the breakdown if that is to happen.
Let’s analyze the price action and determine how likely that is.
XLM Technical Analysis
The weekly time frame technical analysis shows that XLM has failed to break out from a diagonal resistance multiple times (red icons) since its all-time high of May 2021.
After failing to break out in July, the XLM price started a 30% decline that is still ongoing.
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Stellar’s failure to break out is a concern, but the more worrisome development is its breakdown below the $0.39 horizontal area.
The area has been critical since 2021, and while Stellar traded above it, the chances of a breakout seemed intact.
However, with last week’s breakdown, it will be more difficult for XLM to reach the diagonal resistance, since it has an added obstacle at the $0.39 level.
To the contrary, the breakdown has put a decline toward the $0.31 horizontal support area in play.
Furthermore, the correction creates a fourth-wave pullback, since XLM has reached the resistance trend line of its previous ascending parallel channel.
So, while the price action and indicator readings lean bearish, the wave count offers hope that XLM can begin a bullish trend reversal.
Critical Week Ahead
Overall, Stellar’s outlook leans bearish unless the price can reclaim the minor horizontal resistance at $0.36.
The price action and momentum indicator readings are bearish, but the wave count offers hope for a trend reversal.
For the bulls to regain the upper hand, the XLM price has to break out of its descending wedge.
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.
Valdrin Tahiri is a cryptocurrency analyst and reporter at CCN, specializing in technical analysis with a focus on Elliott Wave theory, on-chain metrics, and fundamental research. He brings over seven years of experience in the crypto space as both a trader and writer.
He discovered cryptocurrencies in 2017 while earning his MSc in Financial Markets at the Barcelona School of Economics, which sparked a deep interest in blockchain and market dynamics. Since then, he’s contributed to top crypto outlets like BeInCrypto and CoinGape.
Valdrin also served as Community Manager of BeInCrypto’s Telegram group for three years, helping grow it into one of the largest crypto communities worldwide. His expertise in market structure and price patterns allows him to break down complex trends into clear, actionable insights.
He’s published thousands of articles covering altcoins, Bitcoin cycles, and macro trends.
