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Stellar (XLM) is starting to look like it is playing from XRP's old script, and anyone who has been watching the charts closely this year can see the similarity.
On the daily chart, the coin has created an almost perfect inverse head and shoulders. The left shoulder stretches back to January, the deep head formed in late May, and the right shoulder has been steadily coming together since August.
The price is currently sitting just below the important $0.50 neckline, a level that many believe is the gateway to major growth.
There is more to this setup than just the pattern itself — the market memory it evokes is interesting too. Earlier this year, XRP followed a pretty similar path, broke through its neckline, and did not look back until it had a double-digit percentage climb.
For XLM, the Fibonacci extension levels suggest a similar path, but it will take a lot of buying to get there. The $0.71 level is the 1.618 extension, and $0.77 is close to the 1.786 mark.
What if not?
Now, XLM is trading at around $0.452, not too far from the resistance level but close enough that a strong push could do the trick. Breakouts like this often need conviction, so a daily close over $0.50 with healthy volume would be the clearest green light.
If that does not happen, there is a good chance the price could go back down to test support at $0.40 or even $0.36 before the next try.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team