- XLM price breaks out of a descending parallel channel and retests the upper trendline.
- A continuation of bullish momentum projects Stellar to surge 18% to $0.48.
- A breakdown of the immediate support provided by the 50 SMA at $0.39 could trigger a bearish narrative.
The XLM price hints at a bullish bias that could propel the token one step closer to retest its all-time high.
XLM price awaits bullish confirmation
The XLM price action from February 26 was a sloping downward trend. During this time, Stellar set up multiple lower highs and lower lows, which results in a descending parallel channel when joined by trend lines.
This technical formation has a bullish bias and projects an 18% upswing, determined by adding the channel’s height to the breakout point at $0.40. The target places XLM at $0.48.
April 1 saw a massive spike in buying pressure that pushed the remittance token to produce a decisive close above the channel’s upper trend line, confirming a breakout. Since then, the XLM price has retested the upper trend line showing signs of continuing to its projected target,
Adding credence to this bullish outlook is the recently spawned buy signal from the SuperTrend indicator.
Investors should note that a secondary confirmation will arrive after Stellar creates a decisive close above $0.42, which coincides with the 100 Simple Moving Average (SMA) on the 12-hour chart.
XLM/USDT 12-hour chart
A spike in selling pressure that leads to a breakdown of the lower channel will threaten the upswing. However, a decisive close below the 50 SMA at $0.39 will invalidate the bullish outlook at kick start a bearish one.
In such a scenario, the XLM price might drop 7.5% toward the channel’s middle line at $0.36. If the sellers manage to slice through this level, a retest of the 200 SMA at $0.35 seems likely.