The Stellar (XLM) Price Approaches Convergence of Resistance and Support
The price of Stellar (XLM) is currently nearing the point where a descending resistance trendline and a long-term horizontal support area intersect.
This support area has been in place since April, while the descending resistance line has been in effect since July.
Stellar Returns to Long-Term Support
Looking at the daily time frame technical analysis for Stellar, you can see that the price has been below a descending resistance trendline since July 13.
After reaching a low of $0.105 on August 17, the price attempted to bounce back but was rejected on September 11, continuing its descent.
Currently, the XLM price is trading within the $0.110 horizontal support area. This area has acted as both resistance and support intermittently since April 2022.
When combined with the descending resistance trendline, this creates a descending triangle pattern, which is typically seen as bearish.
The daily RSI (Relative Strength Index) is currently undetermined. The RSI is a momentum indicator used by traders to determine whether a market is overbought or oversold, influencing decisions to accumulate or sell an asset.
With the RSI below 50 and falling, which are both considered signs of a bearish trend, it suggests that the cryptocurrency will likely experience further downward movement.
XLM Price Prediction: Will Bearish Pattern Lead to Breakdown?
Given that the descending triangle pattern is typically viewed as bearish, it is likely that a breakdown from this pattern will occur in the future.
Furthermore, analysts note that the increase on August 17 took place within an ascending parallel channel, indicating a bearish trend.
If the cryptocurrency closes below $0.110, it will confirm the breakdown from the bearish XLM pattern. This could result in a drop of 35% from the current price, taking it just below the $0.076 horizontal support area.
Despite this bearish XLM price prediction, if there is a breakout from the descending resistance trendline, it would indicate that the trend is still bullish.
In that case, a potential 20% increase to the $0.140 resistance level would be the likely future price outlook.
Hot Take: The Future of Stellar’s Price Hangs in the Balance
The price of Stellar (XLM) is at a critical juncture, with a convergence of resistance and support determining its future trajectory. Currently, the descending triangle pattern suggests a bearish outlook, with a potential breakdown leading to a significant drop in price. However, if the cryptocurrency manages to break out from the descending resistance trendline, there is still hope for a bullish trend and a substantial increase in value. Traders and investors should closely monitor these key levels and indicators to make informed decisions about their XLM holdings.
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