XLM price has confirmed a continuation of its uptrend due to the recent price action.
Increased development activity adds credence to Stellar’s bullish outlook.
- A 4-hour candlestick close above the $0.40 resistance may lead to another 20% upswing.
XLM price looks promising after seeing a 200% increase in Q4 2020. While the beginning of 2021 has been quite volatile, Stellar recently managed to retest a resistance barrier that may be pivotal for the continuation of its uptrend.
XLM price must regain $0.40 as support
Stellar appears to have broken out of a bull pennant on February 5. This technical formation is regarded as a continuation pattern that usually leads to further development of the previous trend.
The height of the flagpole hints at a 40% target. If validated, XLM price could rise towards $0.50 before the next significant correction.
To do so, Stellar must slice through the $0.40 decisively. A 4-hour candlestick close above this resistance level will confirm the bullish outlook.
XLM/USDT 4-hour chart
While a spike in buying pressure can help push XLM price above $0.40, the network’s development activity adds to the bullish thesis.
A spike in this metric is often seen before a network update or product release. As a result, speculation usually mounts when this metric increases, consequently pushing XLM price higher.
Stellar’s development activity surged by 35% between January 30 and February 7, which may soon be followed by speculative buy orders that allow XLM to break through $0.40.
Stellar Developer Activity chart
Regardless of XLM price bullish targets, the bearish scenario cannot be overlooked.
A rejection at $0.40 might trigger a sell-off or a cascade of liquidations across the board. If this were to happen, the resulting downswing could push Stellar’s market value to the 50 four-hour MA around $0.33, representing a 15% correction from the current price level.