- Stellar (XLM) price is operating inside a symmetrical triangle, hinting at a likely breakout and up to 60% price surge in the near future.
- However, a fall below $0.12 could change the course, triggering a bearish trend and a possible new low.
As a blockchain enthusiast, I am keenly observing Stellar (XLM), which seems to be preparing for a significant upward surge after weeks of bearish candlesticks. Despite the recent price decrease since July 13, the currency is charting a symmetrical triangle. Based on historical precedents, this pattern often precedes an eventual breakout, especially when it follows an upward trend.
— Stellar Network News (XLM) (@Stellar_News_) August 1, 2023
The Bullish Path Unfolding
If we conduct a deep dive into XLM’s price action and wave count analysis, it suggests that the prevailing trend could still be bullish. This trend could potentially catapult XLM to a new annual high soon. It’s notable that XLM began an upward thrust after breaking from a 616-day descending resistance line this past January. While it managed to cross the $0.105 horizontal resistance, the currency couldn’t hit the next resistance at $0.23, peaking at $0.195 instead.
The Relative Strength Index (RSI), a vital momentum indicator, provides a nuanced picture for XLM. In XLM’s case, despite the decreasing trend, the RSI remains above 50, suggesting that the trend might still be undetermined.
Wave Count Prediction
The Elliott Wave theory, a tool used by technical analysts to understand long-term price patterns, signals a promising future for XLM’s price. The theory suggests XLM’s price could be in the fourth wave of a five-wave upward movement, with the fourth wave forming a triangle pattern, commonly observed during this phase.
If the current wave count stands accurate, XLM’s price may have already reached a local low and is now reinforcing the triangle’s support line. The implication is that XLM is nearing the end of its consolidation pattern, with a breakout on the horizon. This breakout could propel XLM towards the next resistance level at $0.23, indicating an increase of slightly over 60% from its current price.
The Potential Bearish Scenario
While the above scenario paints an optimistic picture, it’s crucial to consider the alternative. If XLM’s price falls below the wave one high at $0.12, it could trigger a bearish trend. In this scenario, XLM’s price could potentially plummet to the next support level at $0.09, resulting in approximately a 36% drop from the current price.
Although the path ahead is lined with uncertainty, the XLM’s price trajectory is filled with intriguing possibilities. Whether it’ll take a bullish or bearish route will depend on several factors, including market sentiment, broader market trends, and strategic decision-making by the Stellar team.