Pattern suggests significant surge in Stellar price
Stellar Lumens price continued to rise on Monday as Bitcoin surpassed the resistance at $101,000 and the crypto fear and greed index entered the greed zone.
Stellar (XLM) reached $0.4630, gaining nearly 50% from its December low as previously predicted.
This rally occurred as most cryptocurrencies rebounded. Bitcoin (BTC) recovered from its low of $92,000 last month to $101,500, while tokens such as Injective, SPX6900, Worldcoin, and Render surged by over 10%.
Stellar’s gains were also influenced by Ripple’s (XRP) bullish momentum. Ripple recently formed a bullish pennant pattern, indicating potential further gains. Some analysts expect Ripple to surge to $100, a 4,066% increase from the current level.
XLM often mirrors XRP’s performance due to their shared history and similar roles in the crypto industry. Jed McCaleb, Stellar’s founder, was a key founding member of Ripple.
However, Stellar’s network faces significant challenges. The first major issue is its stagnant ecosystem, which does not justify its $13 billion market cap. The network currently only hosts 11 dApps in its DeFi ecosystem, with a total value locked of $53 million.
In contrast, Base, a layer-2 blockchain launched in 2023, has accumulated over $3.87 billion in assets and $3.7 billion in stablecoin volume. Despite positioning stablecoins as a core feature, Stellar only has $161 million in stablecoins on its network.
Stellar price analysis:
The daily chart shows that Stellar’s price reached its peak at $0.6376 in December before bottoming out at $0.300, aligning with the lower boundary of the Murrey Math Lines trading range.
XLM has since formed a falling wedge pattern, a bullish chart formation. The token has broken above the upper boundary of the wedge and a key support and resistance pivot point.
Stellar remains above the 50-day moving average and the Ichimoku cloud indicator, indicating continued bullish momentum. The next critical resistance target for bulls is $0.6375, representing a potential 40% increase from the current price. However, a drop below the $0.30 support level would invalidate the bullish outlook.
