Stellar (XLM) appears to be at a technical crossroads. After a 14.7% decline over the past month, the price action suggests a prolonged standoff between buyers and sellers may be nearing a resolution, with indicators hinting that the bulls could be the ones to come out on top.
A Market in a Stalemate
The recent price movement for XLM has been characterized by a period of significant indecision, which is clearly visible on the daily chart. The token has been trading inside a symmetrical triangle pattern, a formation that occurs when buyers and sellers are evenly matched, creating a series of lower highs and higher lows that compress the price into a tighter and tighter range.
This pattern is often a precursor to a significant breakout. Analysis suggests that the structure of this particular triangle is relatively weak on both sides, meaning that even a slight push from either buyers or sellers could be enough to decide the next directional move. This setup is particularly notable as it has formed after a three-month decline of over 19%, suggesting that a breakout could mark the start of a larger recovery phase.
Signs of Seller Exhaustion
A key factor building the case for a potential upward move is the noticeable fading of selling pressure. On-chain analysis using the Wyckoff Volume Chart shows that the yellow bars, which represent selling activity, have been steadily shrinking.
This pattern of receding sell volume is significant because it mirrors a similar setup that occurred between October 17 and 18, which was followed by a 15.1% price rise for XLM. This repetition reinforces the idea that sellers are gradually stepping back and that downside momentum may be exhausting itself, providing an opportunity for buyers to regain control.
Key Levels Every Trader Should Watch
For traders, the immediate future of XLM hinges on a few critical price levels. The entire bullish thesis depends on XLM maintaining its footing above the crucial $0.30 support level, which has held strong and aligns with the triangle’s lower trendline.
If buyers can defend this level and spark an upward breakout, the first major target to watch is $0.33, which would represent a 7.8% recovery. A decisive break above this could then open the path toward $0.35 and even $0.39. However, the price must first contend with nearby resistance at $0.3150; a daily close above this level is needed to rebuild bullish confidence and signal that a more sustained move upward is beginning.
Conversely, the market must be prepared for the possibility of a breakdown. If XLM loses the $0.30 support, it would signal a breakdown of the triangle pattern and could trigger a decline toward the next key support level near $0.28.
