- Stellar (XLM) is forming a bullish flag pattern after breaking out of a long-term descending wedge, signaling a potential continuation toward $0.319 and $0.357 if support at $0.266 holds.
- A decisive move above $0.297 would confirm the breakout, while a drop below $0.266 could invalidate the bullish setup.
Stellar (XLM) is showing signs of a potential bullish surge after a confirmed breakout from a long-standing descending wedge pattern. The technical setup now points to an extended move higher, with market structure, momentum indicators, and Fibonacci levels aligning for a possible continuation rally.
Stellar Bull Flag Formation Suggests Another Leg Up
XLM’s recent breakout on April 12 from a descending wedge that had constrained its price since November 2021 marked the end of a major corrective phase. The wedge bottomed at $0.20 after a WXY double zigzag correction and initiated a reversal with a sharp rally to the $0.297 level.
Since then, XLM has entered a consolidation phase just above reclaimed support at $0.266—an area that aligns with the 0.786 Fibonacci retracement level. This consolidation has taken the form of a bull flag or falling wedge on the 4-hour chart, typically a bullish continuation pattern.
Wave analysis indicates that XLM is completing wave (iv) of a five-wave impulsive structure from the $0.20 low. Provided the $0.266 support holds, wave (v) could soon launch, targeting higher resistance zones.
Technical Levels Point to $0.319 and $0.357
With RSI cooling from prior highs but not yet oversold, conditions favor another leg upward. A decisive close above $0.297 would confirm the bull flag breakout and signal the start of wave (v), with immediate targets at:
- $0.319 – the 0.618 Fibonacci extension
- $0.357 – the 0.5 extension and a key resistance level from previous cycles
Further up, $0.44 represents a macro-level resistance and the 0.236 retracement from the full drop since $0.639. A move to this zone would confirm a broader trend reversal.
Caution Zone Below $0.266
While the structure is currently bullish, invalidation occurs if XLM drops below $0.266. This would break the impulsive count and potentially lead to a retest of $0.24 or even $0.20.
For now, the trend favors the bulls as long as support levels remain intact and momentum continues to build. XLM traders should watch for a breakout above $0.297 to confirm the next bullish wave.