• Stellar price action is getting squeezed from both sides, forming a pennant.
  • As the RSI dips to the lower end of the index, expect bulls to stand ready for a pop higher.
  • Seeing momentum build, $40 will not stop the rally which could overshoot towards $0.46.

Stellar (XLM) price has been stuck in a downward trajectory for most of November. It has only been since November 27 that bulls have advertised their presence by posting higher lows. Now a pennant has formed, and as it unravels expect a bullish breakout that could see a violent move, followed by an acceleration higher between $0.41 and $0.46.

XLM has bulls gearing up for the rally

XLM price has not been able to provide any solid numbers for November. After hitting a cap at $0.44, on November 11, price has been on the back foot ever since.It is only since November 26 that bulls seem to have reemerged with a blue ascending trend line where lows are getting progressively higher. 

The late entry of the bulls in XLM price action makes sense, as bears were grinding down the price action very slowly, which resulted in a very slow drip in the Relative Strength Index, keeping the incentive alive for bears that there was still more downside to come. In recent moves, however, the RSI started to bottom,  offering more limited gains for bears wishing to short Stellar price. With bears starting to doubt if XLM will ever correct towards $0.25 or $0.25, for that matter, bulls have a chance to strike quickly and squeeze bears out of their positions.

XLM/USD daily chart

XLM/USD daily chart

A self-fulfilling prophecy is in the making then, as bears will want to close their positions and book profits, increasing demand for XLM. This will likely lead to an explosion in buy-side volume and see price run up rapidly, taking out the monthly pivot at $0.36 and the historical resistance at $0.40. The next level to watch will be $0.46, which may be where bulls first pause, otherwise, the RSI would be at risk of swinging towards overbought too rapidly. 

The only element that could disturb the strategy currently unfolding, is if more headwinds arise from concerns surrounding covid variants. XLM would then see its pennant breaking to the downside and testing $0.28, possibly even with an attempt towards $0.26, which was held successfully at the beginning of October. Should that break, however, expect bulls to step in and defend $0.20, a key psychological level at the June as well as the July lows.




 

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.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Faux strength or resurgence of bullish momentum?

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Faux strength or resurgence of bullish momentum?

Bitcoin price shows a resurgence of buying pressure as the eastern markets open fresh to a new week. This development, while bullish, could turn sour if BTC fails to overcome a significant hurdle. Assuming this occurs, the recent surge in Ethereum, Ripple and other altcoins could also quickly come undone.

More Bitcoin News

Dragoma on Polygon suffers rug pull, DMA price declines 99.8%

Dragoma on Polygon suffers rug pull, DMA price declines 99.8%

Dragoma on the Polygon Network was hit by a rug pull, leaving DMA holders in a fix. DMA price declined 99.8% since the incident. MATIC’s climb to its $1 target remained unaffected by the event.

More Polygon News

If Tezos price clears this significant hurdle, XTZ holders are in for a treat

If Tezos price clears this significant hurdle, XTZ holders are in for a treat

Tezos price shows a steady grind toward its forecasted target. This development comes after a successful breakout from a bullish pattern. Investors can decide if they should hop on this train or stay away by looking at how XTZ reacts to an upcoming resistance level.

More Tezos News

Here’s what to do if you missed the recent AVAX price rally

Here’s what to do if you missed the recent AVAX price rally

AVAX price shows no signs of stopping as it bounced off a stable support level on August 2 and triggered a massive run-up. This move seems to have reached an upper limit for now and is likely to pull back a little. 

More Avalanche News

Bitcoin: If bulls lose control here, BTC could revisit $21,000

Bitcoin: If bulls lose control here, BTC could revisit $21,000

Bitcoin price shows an interesting setup that could reveal its next move. On closer inspection,  its technicals support a bearish outlook for the leading crypto.  

Read full analysis

BTC

ETH

XRP