- XLM price set up equal lows at $0.228, hinting at a reversal in trend.
- If the sidelined investors step up, a 25% rally to swing high at $0.286 seems plausible.
- A bearish scenario might come into play if Stellar breaks down the range low at $0.199.
XLM price has been on a steady downtrend since setting up a swing high on June 29. The downswing has been a boon since it created the second swing low along a critical support barrier, forming a double bottom. This formation is bullish and suggests that an upswing is likely.
The bullish setup on the flagship cryptocurrency adds credence to this outlook.
XLM price contemplates reversal
XLM price crashed 25% over the past two weeks to set up a bottom at $0.228. Interestingly, this is the second swing low formed since June 22, making it a high probability reversal zone.
Further empowering this outlook is the potential bottom formed on Bitcoin, which could translate to altcoins. Therefore, going forward, investors can expect Stellar bulls to trigger a 25% uptrend that pushes it toward $0.286, the first significant resistance level.
In some cases, XLM prices could tag $0.303, especially if the buyers can produce a decisive 6-hour candlestick close above $0.286.
XLM/USDT 6-hour chart
While the upswing narrative shows signs of life, it is based on the assumption that $0.228 is the bottom. A potential spike in selling pressure that pushes XLM price below it will delay the uptrend.
While this move might allow a retest of $0.218, it would not negatively impact the bulls’ plans. However, a breakdown of the range low at $0.199 will invalidate the bullish thesis.
If such a move were to occur, investors should prepare for a 9% sell-off to $0.180.