Stellar price breaks out as pattern points to a big XLM jump

Stellar Lumens price continued to rise on Monday as Bitcoin passed resistance at $101,000 and the crypto fear and greed index moved towards the greed zone.

Stellar (XLM) rose to $0.4630 as previously predicted, gaining nearly 50% from the December low.

The rise occurred as most cryptocurrencies bounced back. Bitcoin (BTC) rose from last month’s low of $92,000 to $101,500; Tokens such as Injective, SPX6900, Worldcoin and Render increased by over 10%.

Stellar’s gains were also impacted by Ripple’s (XRP) bullish momentum. Ripple recently formed a bullish pennant pattern, signaling potential further gains. Some analysts expect Ripple to rise 4,066% from the current level to $100.

XLM often mirrors the performance of XRP due to their shared history and similar roles in the crypto industry. Stellar founder Jed McCaleb was a key founding member of Ripple.

But Stellar’s network faces significant challenges. The first big problem is its stagnant ecosystem, which does not justify its $13 billion market cap. The network hosts only 11 dApps in the DeFi ecosystem and has a total value of $53 million.

In comparison, layer 2 blockchain Base, launched in 2023, has accumulated over $3.87 billion in assets and over $3.7 billion in stablecoin volume. Although Stellar positions stablecoins as a core feature, it only has $161 million worth of stablecoins on its network.

Star price analysis XLM price chart | Source: crypto.news

The daily chart shows that Stellar’s price peaked at $0.6376 in December and then dropped to $0.300, in line with the lower end of the Murrey Math Lines trading range.

XLM has since formed a falling wedge pattern, which is a bullish chart pattern. The token broke 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 the bulls is $0.6375, representing a potential upside of 40% from the current price. However, a decline below the $0.30 support level will invalidate the bullish view.