Stellar Price Analysis: XLM/USD Pullback Means Bulls Can Run Free
- XLM/USD has seen the required retest of the broken pennant pattern, leaving the door open to greater upside.
- Technically the price developments appear to be stacked in the favor of the bulls.
Recent Price Developments
Stella’s XLM is on its way back up to the north. XLM/USD is running at two consecutive sessions in the green. The price having gained over 17% in the past three sessions, moving back into a bullish trend. Given the recent technical price developments, this current push higher could prove to be sustainable in efforts for a longer-run.
XLM/USD had initially been moving within a pennant pattern structure; this was the case from June until early November. The price was contained within for 19 weeks, a long period of consolidation, after the heavy sell off from April up to June. Furthermore, as seen from the daily chart view, bulls managed to break free and close above the mentioned pattern on 4th November.
The market bulls went on to drive the price to its highest level seen since 24th September, jumping above the $0.28 territory. XLM/USD found its somewhat exhausted, after running into some known strong resistance. This was and still is notable at the 61.8% Fibonacci, the price had also faltered here during the run seen at the back end of September.
Given above-mentioned rejection at the 61.8% Fibonacci, XLM/USD was sent back south. The price was forced to retreat on top of the breached pennant pattern. This move, as described, playing out to the textbook. A breakout to the upside was seen from the pennant, which the retest having now been seen. As a result, a move which is now very likely to invite further buying pressure.
The first major challenge for the bulls, will be to break down the $0.28 price territory. As mentioned above, the area that has caused an issue the past two occasions, where the price has met with the resistance. Should the bulls manage to gain enough momentum, a break will likely be seen. This could bring in play a return to $0.30.
Further to the north, eyes will be on the $0.35 area and beyond. XLM/USD was last seen up at these heights in the back-end of July. It had peaked here on 26th July, before then entering quite a steep bearish trend. The price had fallen a chunky 45%, up until the early part of August, where some stabilization then formed.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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