Peter Smith
After months of declining prices, Stellar (XLM) is finally showing signs of life. The cryptocurrency has pulled away from recent lows around $0.31, and technical analysts are now eyeing a potential rally toward $0.385.
Technical Setup: A Clean Bounce
On-chain analyst Ali recently highlighted that XLM has bounced cleanly off the lower edge of a descending channel pattern. This could mark the beginning of a short-term reversal after months of bearish pressure that dragged the token down through August and September.
Looking at the charts, XLM has been stuck in a downward-sloping channel since mid-July. Each time it tried to push higher, sellers stepped in at the midline, creating a pattern of lower highs and lower lows that wore down bullish sentiment.
But something changed recently. Price found solid support at the lower trendline near $0.31, and buyers showed up in force. The token has since climbed to around $0.328, suggesting that momentum might be shifting. According to the chart projection, XLM could first test resistance around $0.34–$0.35 at the channel's midpoint, then potentially stretch toward the upper boundary near $0.385. That level matters because it lines up with resistance from late September and represents a key technical target for bulls.
What to Watch
Key levels to monitor:
- Support at $0.31: This is the floor that needs to hold. It marks both the lower channel boundary and a psychological level that's been defended multiple times.
- Mid-channel resistance at $0.35: Breaking above this zone would confirm that bulls are gaining control.
- Target at $0.385: The upper trendline represents the main upside objective if this bounce continues.
As long as XLM stays above $0.32, the near-term outlook looks constructive. Past bounces from this trendline have delivered gains ranging from 10% to 18%, which gives traders a historical benchmark for what might come next.
XLM's rebound isn't happening in isolation. Altcoins across the board have been finding their footing as Bitcoin consolidates and traders start looking for oversold opportunities. Stellar's ongoing work in cross-border payments and improving liquidity infrastructure might also be drawing renewed attention from investors who see value at current levels.
Technical indicators back up the bullish case too. The RSI has climbed out of oversold territory, which typically signals that selling pressure is easing. If broader market conditions remain stable, this recovery could have legs.
Peter Smith
