- XLM price has confirmed a 20% rally after it broke out of a descending triangle on March 20.
- However, the 200 four-hour moving average (MA) at $0.42 has successfully rejected it.
- A breakdown of the triangle’s horizontal resistance level at $0.37 could reverse the optimism around Stellar.
XLM price turned bullish after it confirmed an upward breakout of a technical formation. However, the recent drop may have put a dent in bulls’ plans.
XLM price on the verge of a breakout
XLM price found a stable support barrier at $0.37 after a 32% crash between February 20 and 26. Since then, Stellar has constantly been testing this demand level forming lower highs. By drawing a trendline connecting the swing highs and the flat supply barrier, a descending triangle pattern seems to arise.
This technical formation forecasts a 20% upswing to $0.48, determined by measuring the distance between the pivot high and low and adding it to the breakout point on $0.40.
Since XLM price sliced through $0.40 on March 20, it confirmed a bullish target of $0.48 and surged nearly 8%. At this point, the remittances token was met with 200 four-hour MA at $0.42, which rejected the upward trajectory.
Now, Stellar is trading above the 100 four-hour MA at $0.40, which coincides with the breakout point. If XLM price slices through this point, it would put the altcoin in a neutral position allowing both bullish and bearish opportunities an equal chance.
Here, if XLM bulls bounce from the triangle’s hypotenuse, it will trigger a bullish outcome. Following this, the 200 four-hour MA also needs to be pierced, which will open up the possibility of the $0.48 target to be achieved.
XLM/USDT 4-hour chart
On the other hand, if XLM price fails to hold above the descending triangle’s baseline at $0.37, a bearish scenario will evolve.
In this case, Stellar could drop 20% to $0.30 if the bears are left unchecked.
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