- Stellar (XLM) is forming an inverse head and shoulders pattern on its four-hour chart, indicating a potential bullish reversal.
- If support at $0.24 holds, XLM could target a breakout toward $0.39, representing a 50% upside.
Stellar Inverse Head and Shoulders: A Bullish Signal?
Stellar (XLM) is currently catching the attention of crypto analysts with a classic inverse head and shoulders pattern forming on its four-hour chart. This formation is widely recognized as a potential trend reversal signal, especially after a prolonged downtrend or consolidation phase.
An inverse head and shoulders pattern is characterized by three distinct troughs. The central trough, known as the head, is the deepest, while the two outer troughs (the shoulders) are relatively shallower and almost equal in depth. Such a pattern is often a precursor to an upward breakout, making Stellar an asset to watch closely.
XLM’s Recent Price Action and Key Levels
At the time of writing, Stellar (XLM) is up 2.73% in the last 24 hours, trading at $0.2611. The broader cryptocurrency market is also slightly higher as investors anticipate the Federal Reserve’s interest rate decision. Notably, any hints from Fed Chair Jerome Powell regarding future interest rate moves could influence market sentiment.
Following a rally to highs of $0.297 on April 26, XLM experienced a decline, falling below its daily SMA 50 at $0.262 and reaching lows of $0.2519 on May 6. Currently, bullish efforts are underway to push XLM back above the SMA 50 level at $0.262.
Can Stellar (XLM) Break Out?
Crypto analyst Ali has drawn attention to the importance of the $0.24 support level. If this support holds, it could complete the right shoulder of the inverse head and shoulders pattern. A successful breakout above this formation could see Stellar aiming for a target of $0.39, marking a potential 50% upside from current levels.
As the crypto market remains sensitive to macroeconomic developments, Stellar’s price movement will likely be closely watched by traders and investors alike.
