TLDR
- XLM forms inverse head-and-shoulders reversal pattern with right shoulder currently developing
- Breakout above $0.48-$0.52 neckline could trigger 75% rally to $0.70 target
- Current price at $0.41 after 3.3% daily decline but pattern remains intact
- Stellar becomes fourth-largest blockchain in RWA tokenization with $440 million in assets
- Protocol 23 upgrade scheduled for September 3 could boost adoption
While most crypto traders watch Bitcoin’s every move, Stellar (XLM) is quietly assembling one of the most compelling technical setups in the altcoin space. Trading at $0.4127 following a 3.3% daily decline, XLM appears positioned for a potential breakout that could surprise many investors.
The current price action reveals something interesting brewing beneath the surface. Analyst Ali Martinez has identified a head-and-shoulders formation taking shape on XLM’s daily chart. The cryptocurrency is currently developing what appears to be the right shoulder of this classic reversal pattern.
This technical setup carries weight because head-and-shoulders patterns rank among the most reliable reversal signals in technical analysis. What makes this formation particularly interesting is the positioning of the neckline resistance around $0.48-$0.50. This level represents a critical make-or-break point for XLM’s next major move.
The pattern shows up in two forms – standard and inverse head-and-shoulders. The standard version signals bearish outlook, while the inverse suggests potential price increases. According to Martinez’s analysis, XLM is forming the inverse version on its daily timeframe.
XLM Crypto Price Prediction
Should XLM manage to break above the neckline with convincing volume, the technical targets become quite ambitious. The initial rally could push prices toward the $0.64-$0.70 range. This represents potential gains of over 75% from current levels.
Analysts point to a possible target of $0.71 for XLM, aligning with the 1.618 Fibonacci extension. This calculation provides additional confirmation for the bullish price projection based on the technical pattern.
If broader market conditions remain supportive and momentum builds, XLM could extend its rally toward the psychological $1.00 level. Such a move would deliver triple-digit returns for early positioned traders.
The cryptocurrency recently completed a 100% rally in July, climbing from $0.25 to $0.50. This strong performance preceded the current consolidation phase, which often occurs after significant price moves.
XLM is currently facing a short-term price correction after breaking below short-term support. The price dropped to around $0.426, aligning with typical market behavior following bullish runs.
Support Levels and Market Activity
The key support zone to monitor sits between $0.34-$0.35. A breakdown below this area would invalidate the bullish thesis and force traders to reassess their outlook. However, if $0.426 holds as new support, it could signal healthy consolidation before the next breakout.
Trading volume decreased by 22% to $340 million, indicating reduced investor activity in the short term. Price drawdowns often attract accumulation from experienced players who buy during temporary weakness.
In the crypto market, pullbacks frequently test key support levels, removing weak holders before the next advance. This phase could precede a breakout toward the $0.70 target if volume picks up and key support holds.
Stellar Ecosystem Developments
The Stellar ecosystem continues showing strength with growing adoption in cross-border payments and strategic partnerships. These long-term drivers support the bullish technical narrative developing on the charts.
Stellar recently achieved recognition as the fourth-largest blockchain in real-world asset (RWA) tokenization. The network now holds over $440 million in tokenized assets, marking substantial growth in this sector.
This achievement stems largely from Stellar’s partnership with Franklin Templeton, which manages over $1.5 trillion in assets. The collaboration demonstrates institutional confidence in Stellar’s technology and capabilities.
Expectations are building for the Stellar Protocol 23 upgrade scheduled for September 3, 2025. This update could benefit the broader Stellar ecosystem and potentially influence XLM price action.
The PI Network is set to benefit from the Protocol 23 upgrade, adding another layer of development activity to the Stellar ecosystem. These technical improvements often generate increased interest from developers and users.
For now, XLM holders are playing a waiting game, watching to see if this textbook pattern delivers the breakout that technical analysis suggests is possible. The combination of technical setup and ecosystem developments creates an interesting setup for potential price appreciation.
