Date: Thu, May 15, 2025 | 07:15 AM GMT
The cryptocurrency market has shown strong upside strength, with Ethereum (ETH) leading the charge. ETH has climbed more than 56% over the past month and is now trading near the $2,550 mark — its highest level in months. This resurgence is also lifting sentiment across major altcoins, including Stellar (XLM).
XLM is currently showing monthly gains of over 24%, but with today’s drop, a key breakout is being retested — hinting that another bounce back might be just around the corner.
Retesting Inverse Head and Shoulders Breakout
On the daily chart, XLM has formed a clear inverse head and shoulders pattern — a classic bullish reversal signal. This pattern, often considered a sign of a bottoming market, suggests the potential for a major trend shift to the upside.
As shown in the chart, the left shoulder formed near late March, the head in early April, and the right shoulder in early May. After a steady climb, XLM broke above the neckline resistance around $0.2970, which also aligned closely with the 100-day moving average — a critical technical barrier.
Following the breakout, XLM rallied to a high of $0.3346, but soon faced profit-taking pressure, causing a pullback of over 10%. The price has now returned to the breakout zone around $0.29–$0.30, where a retest of the neckline is underway.
What’s Next for XLM?
This current retest is a crucial moment for Stellar. If buyers defend the neckline zone and volume picks up, XLM could see a renewed push toward the technical target of $0.3747, and possibly the psychological resistance at $0.40, representing a potential 34% upside from current levels.
However, if the retest fails and price falls below $0.29, the next key support lies at the 100-day moving average around $0.284, and a deeper correction could follow.
A successful bounce here would confirm the bullish reversal and could set the tone for a broader altcoin rally. But much depends on whether Ethereum — currently leading the pack — can maintain its upward momentum.
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