Stellar (XLM) is trading at $0.2565 as it reaches a crucial juncture. The altcoin’s recent price movements hint at a potentially bearish setup, particularly with the formation of a classic double top pattern on the 4-hour chart.
This technical formation, if confirmed, could spell trouble for Stellar, setting the stage for further downward pressure.
Double Top Pattern Begins
The double top pattern began to take shape as XLM surged to around $0.30, encountered resistance, and pulled back. After a period of consolidation, Stellar’s price rose again, testing the $0.30 mark from the top. However, despite reaching this level once more, sellers stepped in, quickly rejecting the altcoin.
This repeated struggle near the $0.30 resistance signals a weakening of bullish momentum and suggests that sellers are still in control of this price zone. A double top usually forms when an asset reaches a high, pulls back, and then attempts to break through the same level again, only to be met by strong selling pressure.
The neckline of this double top pattern is located at the $0.25 support. A decisive breakdown below this level would not only confirm the double top pattern but also likely accelerate selling pressure, pushing XLM toward the next key support at $0.2213.
On the other hand, if buyers can defend the $0.25 support and manage to spark a bounce from this area, we could see renewed buying pressure emerge. This could propel XLM back toward the $0.27 resistance, setting the stage for another attempt at breaching the $0.30 resistance.
In the present setup, immediate resistance levels are at $0.27 and $0.30, while support levels are clearly marked at $0.25 and further down at $0.2213. These levels provide a roadmap for traders navigating the market right now. The tug-of-war between buyers and sellers is intensifying, and the outcome at $0.25 will likely determine the next significant move.
As XLM trades slightly above its critical neckline at $0.2565, the next few sessions are likely to be pivotal in determining the direction of the Stellar token. A strong defense of the $0.25 zone could still salvage some bullish hopes, while a breakdown would set the stage for deeper losses.
