- XLM price is consolidating inside a bull flag pattern after the recent market crash.
- The Tom DeMarket Sequential indicator has flashed a buy signal hinting at a reversal of bearish momentum.
- A decisive close above the flag at $0.47 opens the possibility of a 60% bull rally.
XLM price is recovering after dropping nearly 42% from February 22 to 23. Regardless of the short-term bearish pressure, both technical and on-chain indicators suggest that bulls will push Stellar higher.
XLM price needs to blast through stiff resistance
XLM price action witnessed from late January to-date has resulted in the formation of a bull flag pattern. The initial 165% upswing from $0.23 to $0.60 created the “flag pole,” while the consolidation from $0.60 to $0.34 via a series of lower highs and lower lows has formed the “flag.”
This setup forecasts a 60% surge, which is determined by measuring the flag pole’s length and adding it to the breakout point at $0.47. If validated by an increase in buying pressure, XLM price could rise to $0.77.
The Tom DeMark (TD) Sequential indicator adds credence to the optimistic outlook. This technical index presented a buy signal on XLM’s 4-hour chart, anticipating a one to four candlesticks upswing.
XLM/USDT 4-hour chart
In addition to the technicals, on-chain metrics are also painting a bullish scenario for XLM price.
For example, Stellar’s on-chain volume saw a 47% increase on February 22. This metric rose another 15% from $2.8 billion to $3.2 billion in the next two days, showing healthy network activity.
In the meantime, XLM price dropped, creating a bullish divergence against its on-chain volume.
XLM on-chain volume chart
The recent 32% upswing in development activity fuels the bullish narrative as well. Investors tend to see an increase in this metric as a buy signal since it usually leads to a protocol update, product launch, or some sort of important announcement.
When considering the technical and on-chain metrics previously evaluated, it seems like Stellar price is poised for an upswing.
XLM developer activity chart
Regardless, investors should note the presence of a cluster of resistance barriers ranging from $0.43 to $0.46, formed by the short, mid, and long-length exponential moving averages (EMA). Rejection at this cluster could delay the bull flag’s breakout.
But if XLM price slices through the support barrier at $0.35, it would invalidate the bullish thesis and trigger another sell-off.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin Weekly Forecast: BTC nosedives below $95,000 as spot ETFs record highest daily outflow since launch
Bitcoin price continues to edge down, trading below $95,000 on Friday after declining more than 9% this week. Bitcoin US spot ETFs recorded the highest single-day outflow on Thursday since their launch in January.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Solana Price Forecast: SOL’s technical outlook and on-chain metrics hint at a double-digit correction
Solana (SOL) price trades in red below $194 on Friday after declining more than 13% this week. The recent downturn has led to $38 million in total liquidations, with over $33 million coming from long positions.
SEC approves Hashdex and Franklin Templeton's combined Bitcoin and Ethereum crypto index ETFs
The SEC approved Hashdex's proposal for a crypto index ETF. The ETF currently features Bitcoin and Ethereum, with possible additions in the future. The agency also approved Franklin Templeton's amendment to its Cboe BZX for a crypto index ETF.
Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy
Bitcoin (BTC) price has surged more than 140% in 2024, reaching the $100K milestone in early December. The rally was driven by the launch of Bitcoin Spot Exchange Traded Funds (ETFs) in January and the reduced supply following the fourth halving event in April.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.