• XLM price has erected an ascending parallel channel on the 4-hour chart.
  • A bounce from the setup’s lower trend line, although logical, seems unlikely.
  • Stellar’s bear flag pattern on the 1-hour chart adds weight to the bearish outlook.

XLM price has slid into consolidation after a brief upswing. Technicals present a bearish outlook for the coin due to mounting pressure from overhead barriers.

XLM price at an inflection point

XLM price surged nearly 36% between April 10 and 11, resulting in a local top at $0.65. Since reaching this point, Stellar has created higher highs and higher lows, which results in an ascending parallel channel when the swing points are connected using trend lines.

Since April 14, XLM price has been trading close to the channel’s lower boundary at $0.62. Any attempts from the bulls aiming to head toward the upper trend line have failed due to the supply zone ranging from $0.63 to $0.65. Therefore, an exhaustion of the buying pressure will be fatal for the remittance token.

If this price swing slices through the lower trend line at $0.61, it will kick-start a new downtrend. Supporting this bearish move is the formation of a bear flag on the 1-hour chart.

This setup is a continuation pattern that contains a large crash in XLM’s market value, known as a flagpole, followed by a consolidation called the flag.

A breakdown of the lower trend line of the flag at $0.62 will signal the start of a 14% downtrend, which is obtained by adding the flagpole’s height to the breakout point.

This move places XLM price at $0.53, deep within the demand zone, extending from $0.55 to $0.50.

XLM/USDT 4-hour, 1-hour chart

While the bearish scenario seems logical due to the multi-timeframe analysis, a potential spike in buying pressure caused by an unforeseen event could breach the supply zone. Such a move would invalidate the bearish scenario and likely trigger the buyers to make a move.

Under such circumstances, XLM price could rise 9.5% to tap the channel’s upper trend line at $0.71, which coincides with the Momentum Reversal Indicator’s breakout line.

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.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Cardano Price Forecast: ADA braces for a test of $2 amid a potential bull pennant

Cardano (ADA/USD) is extending its recovery this Sunday after a sharp sell-off witnessed a day before. ADA/USD charts a bull pennant on the 12H chart.  A test of the $2 mark appears inevitable if the bullish pattern is confirmed. RSI has regained upside momentum, well above 50.00.

More Cardano News

XLM Price risks further falls towards $0.53 amid double top reversal

XLM/USD is falling for the third straight day on Sunday. $0.53 support appears at risk after the double top reversal on the 1D chart. RSI points south towards the midline as the XLM price eases from record highs.

More Stellar News

Dogecoin: Defending 21-DMA is critical after Musk calls it a ‘hustle’

Elon Musk's appearance on 'SNL' throws DOGE under the bus. DOGE/USD extends sell-off into Sunday, hitting five-day lows. DOGE bulls remain hopeful as 21-DMA support holds, with RSI still bullish.

More Dogecoin News

Ethereum bulls gather strength for a sustained break above $4000

Ethereum bulls take a breather after Saturday’s $500 rally to record highs. The No. 2 coin eyes additional upside after rising wedge breakout on the 4H chart. RSI is in the overbought region, dip buying to keep the uptrend intact.

More Ethereum News


Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast