Saad Ullah
Stellar (XLM) is showing signs of a potential rally after breaking through a critical resistance level. Following weeks of sideways movement, the token is now testing a major descending trendline, and early indicators suggest bulls may be regaining control. If this momentum continues, XLM could be headed toward the $0.50 mark in the near term.
Stellar Breaks Out of a Prolonged Downtrend
Market analyst Ali recently highlighted that XLM is attempting to break free from a long-standing descending resistance line on the 4-hour chart.
This development is drawing attention as interest in altcoins continues to grow, especially for projects with real-world applications like Stellar's cross-border payment infrastructure. The timing aligns with broader rotation into utility-focused tokens as traders look beyond Bitcoin's consolidation phase.
Chart Analysis: Technical Signals Point Higher
Several key technical factors are supporting the bullish case:
- Descending triangle breakout: XLM has pushed above the descending trendline that had capped price action for weeks - a classic bullish reversal pattern
- Support levels: The nearest strong support zones sit around $0.3725 (Fibonacci 0.786 retracement) and $0.35, which buyers need to defend to maintain upward momentum
- Resistance levels: On the upside, traders are watching $0.42 (Fib 0.5), $0.44 (Fib 0.382), and $0.47 (Fib 0.236) as potential profit-taking zones
- Bullish projection: If the current momentum holds, the rally could extend to the psychologically important $0.50 level, where significant selling pressure is expected
This setup is notable because it combines both technical breakout signals and fundamental market dynamics. As Bitcoin remains range-bound, capital is flowing into altcoins with clearer short-term setups. Stellar's ongoing role in blockchain-based payments keeps it on investors' radar, particularly as adoption discussions heat up across the industry.
What's Next for XLM
Stellar's price action suggests a shift toward bullish territory may be underway. If buyers can sustain momentum above the descending trendline, the path toward $0.50 looks increasingly realistic. That said, a failure to hold above $0.37 would undermine the breakout narrative and could trigger renewed selling pressure. For now, XLM remains one of the more compelling altcoin setups to monitor as October unfolds.
Saad Ullah
