World of Charts has identified a promising setup in Stellar’s price action that could lead to significant gains. The cryptocurrency analyst points to a bullish flag pattern that suggests XLM is preparing for its next major move.
The XLMUSDT pair has been consolidating in what technical analysts call a bullish flag pattern on the 4-hour timeframe. World of Charts notes that this consolidation phase comes after a strong upward movement, creating the classic flag formation that often precedes continuation moves.
The consolidation has been taking place in an orderly fashion, with price contained within parallel downward-sloping trendlines. This type of price action typically indicates a temporary pause in the uptrend rather than a reversal, according to the analysis shared by World of Charts.
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Potential for a 2x Move
“Expecting 2x after successful breakout,” states World of Charts, highlighting the significant profit potential once price breaks above the flag pattern. This projection aligns with typical technical measurements for flag patterns, where the height of the initial move is often reflected in the subsequent breakout.
The $0.38 level has served as a key resistance during the consolidation phase. A decisive break above this level could trigger the anticipated rally. Currently trading above $0.74, XLM appears positioned for further upside, though traders should watch for potential short-term resistance at psychological price levels.
Read More: Analyst Warns: XRP Triangle Chart Could Signal Major Rally or Drop
Trading Considerations
While World of Charts maintains a bullish outlook, prudent traders might want to wait for confirmation of the breakout before entering positions. The strong technical setup and clear invalidation levels make this an appealing opportunity for those looking to trade XLM’s next potential move higher.
Monitoring trading volume during the breakout attempt will be crucial, as increased volume would help validate the pattern’s completion and support the projected price target suggested by World of Charts.
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