Stellar (XLM) price shows short-term bearish signals, which may precede a decline to $0.090 and possibly $0.083.
Since May 2021, when it reached a peak of $0.798, the price of Stellar has fallen in a descending wedge formation. Since the descending wedge is considered a bullish pattern, it is often expected to lead to a breakout.
The descending wedge is just one of many bullish readings in this time frame. When Stellar price first dipped below the $0.084 support area in December, it bounced at the wedge support line (green icon) and then recaptured it. Such a reclaim is seen as a positive event as it invalidates the previous breakdown.
This week, the Stellar price is in the process of breaking out of the descending wedge. Since the wedge has been in place for 616 days, a breakout from it could lead to a significant upward move. The nearest resistance area is $0.130.
If, however, the price of Stellar fails to hold the breakout, it could fall and retest the $0.084 area again.
The weekly RSI is rising, but is still below 50 and has not generated any bullish divergence. Therefore, more is needed to confirm the validity of the breakout.
Stellar Price Breaks Out of Short-Term Resistance
The technical analysis from the daily time frame shows that the Stellar lumens price broke out from a descending resistance line and validated it as support on January 18 (green icon). It has since increased and is approaching the $0.107 resistance, which is both the resistance level of the 0.618 Fib and resistance area. Due to this resistance, it will be difficult for the price of Stellar to break through.
Moreover, the daily RSI is in the process of generating a bearish divergence, although it has yet to validate the trend line (green line).
Finally, the six-time chart shows that the price of Stellar Lumens is trading inside a parallel ascending channel. These channels usually have remedial structures.
Moreover, XLM price is trading near the resistance line of the channel and has generated a bearish divergence. These are all signs that a downward movement could occur.
Whether the Stellar price breaks down from the support line of the channel or bounces could determine the future trend. A break down to the 0.5 Fib level at $0.083 is likely, coinciding with the long-term support area previously laid down.
On the other hand, a breakout from the channel may take the price to $0.13.
Finally, the most likely forecast for Stellar price is a decline to the support line of the parallel channel and a possible breakdown to $0.083. On the other hand, a breakout from the channel would invalidate this bearish XLM price analysis and take the price to $0.13.
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