The cryptocurrency market is seeing a mild cooldown after a strong rally that recently pushed Bitcoin (BTC) to a new all‑time high of $126,000, before easing to around $121,000. Ethereum (ETH) has also slipped slightly to $4,350, adding short‑term pressure on several altcoins — including Stellar (XLM).
Despite the broader pullback, XLM is flashing early signs of recovery. After a notable drop earlier this week, the token is now trading back in green — and more importantly, it’s retesting a key breakout zone that could set the stage for its next major move upward.
Retesting Falling Wedge Breakout
On the daily chart, XLM has been consolidating within a falling wedge pattern for several weeks — a classic bullish reversal setup that often signals a potential upside breakout once momentum shifts.
During this consolidation, XLM found solid buying support around the $0.3444 zone, where bulls began accumulating. This steady accumulation pushed the token higher, eventually triggering a breakout above the wedge’s resistance near $0.3837, indicating a shift in the overall market structure from bearish to bullish.
Following the breakout, XLM rallied to a local high of $0.4140, where short‑term profit‑taking led to a mild correction. The token is now retesting the breakout area near $0.38, which aligns closely with the former resistance trendline — a level that typically acts as new support after a confirmed breakout.
What’s Next for XLM?
This technical retest is a crucial moment for Stellar. If buyers step in and the price holds above $0.38, it could confirm a strong continuation setup. In such a case, the first upside target would be a retest of the $0.4140 high. A successful close above this zone would likely fuel a push toward the next resistance around $0.5430, representing a potential 41% upside from current price levels.
However, traders should also remain cautious — a failure to defend the breakout trendline could lead to a drop back inside the wedge pattern, which might invalidate the bullish setup and delay any significant recovery.
Disclaimer: This article is for informational purposes only and not financial advice. Always conduct your own research before investing in cryptocurrencies.