- 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,
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