Stellar (XLM) Shatters Resistance: Chart Breakout Sparks Crypto Frenzy

Stellar's price just pulled off a technical coup—blasting through key resistance levels with the elegance of a bull market veteran. Here's why traders are scrambling.

The breakout playbook:

XLM's chart formed a textbook-perfect ascending triangle over the past quarter, culminating in today's 15% volume-spike breakout. The move puts it squarely in 'blue sky' territory—no overhead resistance until the next psychological price level.

Institutional whispers:

Rumors swirl about a major payment processor testing Stellar's network for cross-border settlements (because SWIFT's 1970s tech wasn't slow enough). Meanwhile, retail traders are piling in—XLM futures open interest hit a 90-day high.

Caveat emptor:

While the technicals scream bullish, remember: in crypto, even 'sure things' can evaporate faster than a hedge fund's ethics during a margin call. Watch for a confirmed close above $0.35 to validate the breakout.

Reverse Head and Shoulders on XLM

Analyst ALi Martinez highlighted the reverse head and shoulders pattern forming on the daily chart, with the left shoulder extending back to January, the DEEP head appearing towards the end of May, and the right shoulder nearing completion early this month. This pattern emphasizes the psychological and technical threshold at $0.50. The distinct neckline provides a clear vision of where a potential momentum shift could be confirmed.

The pattern’s reminder is indeed noteworthy. Earlier this year, the altcoin XRP experienced a similar pattern, with the neckline breaking and the price surging into double digits. For XLM, following this path depends not only on the existence of the pattern but also on the volume at the time of the breakout.

Potential Breakout and Pullback Scenario

For the breakout to be considered reliable, a daily candle close above $0.50 and healthy volume are necessary. If this dual confirmation does not occur, the price might retreat to the $0.40 support level or even the next support threshold at $0.36. These levels correspond to potential pullback points when the pattern does not work as expected.

If the breakout occurs, Fibonacci extension levels will serve as guidance. The $0.71 level, corresponding to the 1.618 extension, stands as the first measured target, while $0.77, matching the 1.786 extension, indicates the next target zone. For the price to advance to these target levels, sustained demand and increased volume are required post-breakout. Otherwise, the price may continue hovering around the pattern’s neckline.