Here’s why Stellar Price Could Go Parabolic Soon

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As a seasoned analyst with over two decades of experience in the financial markets, I have seen my fair share of market fluctuations and chart patterns. The current situation with Stellar (XLM) is particularly interesting, as it appears to be forming a classic falling wedge pattern – a reversal sign that often signals an impending bullish trend.

Over the past three weeks, the value of Stellar has significantly dropped, mainly due to a pessimistic investment climate triggered by the Federal Reserve’s 2025 interest rate decision. The price of XLM, however, seems to be recovering, having established a falling wedge pattern and rebounded at its 50-day moving average. This suggests that investors are taking advantage of the dip and buying up Stellar, hinting at an imminent recovery.

Stellar Price Technical Analysis: Falling Wedge Forms

Stellar Lumens’ coin experienced a significant drop, creating several successive lower highs and lower lows, mirroring Bitcoin‘s and many other altcoins’ crash. This downward trend has resulted in a falling wedge chart configuration, which is created by two declining trendlines. The upper trendline joins the peak points on December 2 and 17, while the lower lines connect the lowest points since November 26.

A falling wedge is often a well-known indicator of a price trend reversal. Typically, this reversal occurs as the two lines forming the wedge approach the point where they meet, which is close at hand.

Another bullish case is that the XLM price has found support at the 50% Fibonacci Retracement level. This retracement links the lowest and highest levels in 2024.

It appears that Stellar’s price may have concluded its trend of returning to its average value, which is likely why it experienced a decline in recent days. This phenomenon, known as mean reversion, refers to a financial asset like a cryptocurrency or stock moving back towards its typical price. In this instance, it has discovered notable support at the 50-day moving average, and it hasn’t dipped below this point for the past two consecutive days.

The price of XLM has been finding support close to the lower boundary of Andrew’s pitchfork indicator, suggesting a potential strong upward momentum in the coming days. If this bullish breakout occurs, the coin could surge and potentially reach the significant level of $0.50, which aligns with the 23.6% Fibonacci retracement level.

If Stellar Lumens’ price falls below its lowest point from last week ($0.3125), the bullish outlook could be negated and the coin might descend further to the significant support level of $0.30.

XLM Price Has Bullish Fundamentals

The value of Stellar could potentially rise in the coming weeks due to its strong underlying factors. Notably, Stellar and Ripple are frequently compared because they both focus on the payment sector. Additionally, Jed McCaleb, Stellar’s creator, is also one of Ripple’s co-founders.

Consequently, the strong showing of Ripple might boost the XLM price, similar to its past impact. Earlier, we noted that some analysts anticipate an impressive 60% increase in the XRP price if the SEC endorses a spot XRP investment fund. Moreover, another expert predicts that the Ripple price could reach $4 due to a rise in Binance transactions.

Additionally, it’s worth noting that Stellar’s network is performing quite well, as the overall value locked in DeFi experiences a gradual revival. According to DeFi Llama, the TVL (Total Value Locked) on the Stellar Network exceeded 135 million XLM this week, which is higher than the previous low of 112 million XLM from last week.

Consequently, it seems that a blend of robust foundations and technical analysis might potentially lead to an immediate increase in the Stellar price.

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2024-12-23 15:24