- Stellar (XLM) is testing key support at $0.35, with a potential recovery to $0.44-$0.45 if buying pressure increases.
- However, a drop below $0.35 could trigger further declines, possibly reaching $0.27.
After facing a period of volatility, Stellar (XLM) has been showing signs of consolidation, and the price action is sending mixed signals. Currently trading at around $0.38, XLM is at a crucial juncture, testing support levels that could define its next move. While a recovery of up to 16%, pushing the price toward the $0.44-$0.45 range, is on the table, the cryptocurrency could also face further declines if bearish momentum gains strength.
Crucial Support at $0.35: The Key to Recovery
For XLM to have any shot at a sustained recovery, it needs to maintain support above $0.35. This price level aligns with the 100 EMA (Exponential Moving Average), a historically significant zone that has provided solid support in the past. If XLM manages to stay above this critical level, there’s a higher chance of a rally. The first significant resistance to break on the path to recovery is $0.40, a key psychological level that also aligns with short-term moving averages.
In the past, XLM has been rejected in the $0.44-$0.45 range, but a breakout above $0.40 could lead to a retest of that level. A successful push past this resistance would likely fuel further buying interest, possibly triggering a move toward $0.47—the next major hurdle.
Indicators Hinting at Potential for Rebound
Technical indicators are signaling that XLM may be nearing oversold conditions, with the Relative Strength Index (RSI) showing signs of weakness. This could open the door for buyers to step in, especially if trading volume starts to pick up. A volume-driven rebound could easily push XLM back toward the $0.44-$0.45 resistance, and if bulls continue to build momentum, a retest of the $0.47 resistance is not out of the question.
Potential for Bearish Continuation if Key Levels Fail
On the flip side, if XLM fails to hold above the $0.35 support, the situation could quickly turn bearish. The next important support to watch is at $0.33, which corresponds to the 200 EMA. If XLM breaks below this level, the price could tumble further toward $0.27—the lowest point prior to its rally in November.
A quick drop below $0.35 would also likely encourage short sellers, potentially accelerating the decline. Additionally, if the broader market remains weak, particularly if Bitcoin struggles to find upward momentum, XLM could be pulled down to lower support zones. Traders should watch the $0.35-$0.40 range closely, as breaking through either level could signal the next major move for XLM.
Watch $0.35 to $0.40 for Direction
The near-term price action of Stellar hinges on the ability to hold above the $0.35 support zone. While XLM has the potential for a 16% recovery toward $0.44-$0.45, failure to maintain key support could lead to a deeper decline. Traders should remain vigilant and monitor these critical levels for the next indication of where XLM is headed.
