- XLM price is consolidating in a bullish pennant pattern, suggesting a massive 60% run-up soon.
- A decisive 6-hour candlestick close above $0.51 is necessary to break out from the bullish pennant.
- A bearish breakdown from the pennant could result in a downswing to the hourly 100 SMA at $0.41.
XLM price saw a 160% upswing between late January and mid-February to hit a new all-time high at $0.60. However, since hitting the record level, Stellar has slipped into a consolidation phase.
Depending on its close relative to a bullish pennant pattern drawn in the six-hour chart, XLM could either surge massively or drop to an immediate support barrier.
XLM price prepares for a higher high
XLM price shows a bullish bias due to the formation of a bullish pennant pattern. The 160% surge between January 28 and February 13 formed the “flag pole,” while the consolidation since then resulted in the “pennant.”
This continuation pattern forecasts a 60% upswing to $0.82, determined by measuring the flag pole’s length and adding to the breakout at $0.51.
Therefore, a six-hour candlestick close above $0.51 is imperative.
XLM/USDT 6-hour chart
Adding credence to this bullish outlook is the increase in developer activity metric. This metric shows a 45% increase in the last six days while the price has remained relatively the same, suggesting that it might not be priced-in.
Usually, investors perceive a spike in this metric as bullish as it could mean a new update or developmental rollout for the project.
Stellar developer activity chart
On the other hand, a breakdown of Stellar price below the six-hour 50 moving average (MA) at $0.49 would be the first indication of mounting selling pressure. Moreover, a six-hour candlestick close below the pennant at $0.46 would invalidate the bullish outlook and suggest the dawn of a downtrend.
This resulting selling pressure would trigger a 10% correction up to the 100 six-hour MA at $0.41.
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.