- The digital asset is trading just above a critical support level that must be held.
- In the long term, Stellar bulls still have the upper hand, as XLM remains in a huge uptrend.
- A bear flag on the 1-hour chart could pose some problems for Stellar in the short term
Stellar has enjoyed an amazing rally since the beginning of 2021 and hit a yearly high at $0.69 on April 14. The digital asset must hold a crucial support level to continue with the uptrend and reach new highs.
XLM price must defend this significant trendline to see a new leg up
XLM is trading at $0.625 at the time of writing, right above the 25 four-hour EMA, and a trendline formed since April 9. Both converge at $0.61, which is the critical point that bulls must hold.
XLM/USD 4-hour chart
A rebound from this crucial support should drive XLM price up to its previous high of $0.69. A breakout above this point will push Stellar toward the 123.6% Fibonacci level at $0.77 and even as high as $0.90 at the 161.8% Fibonacci level in the longer term, which would be a new all-time high.
XLM/USD 1-hour chart
However, losing this critical level would also validate a bear flag formed on the 1-hour chart. A breakdown of this flag has a price target of $0.53, but XLM bears have other targets before that at $0.58, a low established on April 14 and $0.56, formed on April 12. The lack of trading volume in the past 24 hours indicates that XLM is on the verge of a significant move.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.