- XLM price has stalled at the 50-day simple moving average (SMA).
- A squeeze pattern can be seen on the daily chart.
- If short-term price resistance is overcome, a 40% gain awaits Stellar.
XLM price triggered a squeeze pattern on the daily chart on March 15. Stellar gained 7% the next day at the intraday high before reversing back below the 50-day SMA.
XLM price may need a fundamental catalyst
Multiple technical indicators scream that Stellar is about to see a jump in volatility, whether it is the Relative Strength Index (RSI), the volume profile, or the Bollinger Bands. The bottom line is that the combination of a squeeze pattern with the symmetrical triangle nearing its apex has put traders in a challenging position.
Do they buy the squeeze signal, or do they wait for Stellar to breakout from the symmetrical triangle?
For the bullish narrative to become a reality, XLM price has to overcome many price levels before confirming a new rally. Those levels include the symmetrical triangle’s declining trendline and the 50-day SMA at $0.41, the upper Bollinger Band at $0.43, and lastly, the upper Keltner Band at $0.44. To be sure, traders should look for a daily close above all those levels.
Next, Stellar will meet heavy resistance between $0.49 and $0.52. Adding to the importance of that price range is the .618 Fibonacci retracement level at $.495.
If all the resistance levels are overcome, XLM price should test the yearly high at $0.61.
XLM/USD daily chart
Similar to the upside, there are layers of downside support to be mindful of, beginning with the lower Bollinger Band at $0.38, the lower Keltner Band at $0.376, and finally, the March 15 low at $0.367.
The next significant support does not arise until the convergence of the February 23 low with the 100-day SMA at $0.31.