Stellar Lumens (XLM) has shown signs of life after bouncing from a critical support level, but traders should approach this rally with caution. While the immediate momentum appears strong, some technical factors suggest this upward move might face significant resistance ahead.
The XLM/USD pair found solid support around $0.31, triggering a notable bounce. This level has proven reliable in the past, consistently attracting buyers when tested. The current upward movement suggests renewed interest from investors, with the price climbing steadily from this support zone.
What you'll learn 👉
XLM Potential Rally and Key Resistance
Technical analysis indicates a possible 19% surge from the current price of $0.34, potentially pushing XLM toward the $0.40 mark. However, this target coincides with a descending trendline that has capped previous rally attempts. This trendline has been a persistent barrier, turning back several bullish advances over recent months.
For any sustainable bullish movement, XLM price needs to convincingly break above this descending trendline. A successful breach would mark a significant shift in market structure and could open the path toward $0.5 or higher.
However, given the trendline’s historical significance, such a breakout would require substantial buying pressure and volume.
Read Also: Berachain (BERA) Bulls Push for $12—Can They Overcome Key Resistance?
Why the XLM Rally May Fail
The most likely scenario, based on current market structure, points to another rejection at the descending trendline. If this occurs, XLM would likely retreat to retest the $0.31 support level, maintaining its pattern of lower highs. This technical setup suggests traders should remain cautious despite the current bullish momentum.
The broader picture for XLM remains uncertain until it can definitively break its current technical constraints. While short-term traders might find opportunities in this bounce, longer-term investors should watch for a clear break of the descending trendline before considering more significant positions.
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