The analysis of Stellar (XLM) shows the development of a head-and-shoulders pattern, which may signal a potential trend reversal upon breaking a key resistance level.
Formation of the Head-and-Shoulders Pattern
Stellar (XLM) is trading at $0.41, equating to a 1% decline in the past 24 hours and a 3.63% decrease over the week. The trading volume is at $380.46 million, indicating continued activity while consolidating near key levels. Analyst Ali noted that XLM is forming the right shoulder of a head-and-shoulders pattern, which is often seen as a reversal signal. The neckline of this structure is around $0.48–$0.50, and a confirmed breakout above this level may suggest higher targets, potentially extending toward $0.70 and beyond $1.00.
Short-Term Pressure and Declines
On shorter time frames, analyst Franklin noted that XLM recently faced a breakdown after failing to hold the $0.46 resistance zone. The price fell by approximately 16%, providing profits for short positions during the move. Support is around $0.38, and if this level breaks, the next potential target could shift toward $0.35.
Market Technical Overview
The contrasting views from daily and intraday charts highlight a split market picture. On the higher time frame, the head-and-shoulders setup points to potential bullish reversal upon clearing resistance near $0.50. On the lower time frame, bearish pressure remains active, with sellers maintaining control below resistance zones. Traders are closely watching the $0.38–$0.40 range, and holding this support may allow the right shoulder to complete and build momentum toward a neckline test.
The current situation with XLM requires careful analysis, especially regarding the head-and-shoulders pattern. Further price movement will depend on the ability to hold key support levels and the pressures from sellers.
