Stellar (XLM) Has Found Itself in Bearish Waters

XLM is trading at $0.2358 and is up by almost 7%, with a trading volume of $385.44 million over the last 24 hours

Stellar (XLM) has been struggling alongside the broader cryptocurrency market. As Bitcoin struggles to hold key support levels, it continues to put pressure on altcoins, including XLM. However, while the sentiment toward Stellar has shifted from bearish to bullish, there are signs that a possible bullish reversal could be unfolding.

Stellar is currently trading at $0.2358 and is up by almost 7%, with a trading volume of $385.44 million over the last 24 hours. Its market cap is $6.88 billion. Conversely, its price has come down by 12.38% on the weekly chart and 5.96% in the month that has just passed, displaying caution among traders.

Chart: TradingView

XLM Could Be Approaching Key Support Zone—Man of Bitcoin

According to prominent crypto analyst Man of Bitcoin, Stellar is making waves again as it approaches a key support zone between $0.221 and $0.209. While Man of Bitcoin cautions that the current setup may not be the strongest from a risk-reward standpoint, he emphasizes that the price action is operating within clearly defined boundaries, offering traders a reference for short-term decisions.

Pointing out the triple top formation at $0.28, Man of Bitcoin further notes that a breakout above this level could propel Stellar to retest the 2023 highs. However, he adds that such a move may be met with resistance, presenting another opportunity for traders to capitalize on.

Man of Bitcoin concludes by observing that Stellar's price has been on a downward trajectory since August 2022, and while the current setup may not be ideal for aggressive entries, it provides a framework for traders to make informed decisions based on their preferred timeframes and risk tolerances.

XLM Shows Regular Bullish Divergence on MACD

Technical analyst Andrew Griffiths noted a Falling Wedge Pattern on the XLM chart, a classic bull reversal indicator. While an actual breakout has not taken place yet, Griffiths noted a Regular Bullish Divergence on the MACD (Moving Average Convergence Divergence), often the precursor of upward price action.

According to him, this divergence is bullish because the lower lows in price are aligning with higher lows in MACD. Moreover, the MACD line has crossed over the signal line in oversold territory, which is another bullish signal.

Image: Andrew Griffiths via X

For the moment, Stellar is in suspension, with its future actions determined by overall market sentiment, Bitcoin stability, and the power of its technical patterns. Both traders and long-term investors would do well to monitor the $0.221-$0.209 levels closely. A pop at this support, accompanied by a wedge break, could create renewed enthusiasm for XLM as it re-emerges as a comeback tale.