- The XLM price has established an ascending parallel channel on the 4-hour chart.
- A ricochet off the setup lower trendline is logical, but unlikely.
- Stellar’s bear flag pattern on the 1 hour chart adds to the bearish outlook.
The XLM price slipped into consolidation after a brief upturn. Due to the increasing pressure from overhead barriers, the technical data offers a declining outlook for the coin.
XLM price at a turning point
XLM price rose nearly 36% between April 10 and April 11, bringing it to a local high of $ 0.65. Since reaching this point, Stellar has created higher ups and downs, resulting in an ascending parallel channel when the swing points are connected by trend lines.
As of April 14, the XLM price has been trading near the lower bound of the channel at $ 0.62. All attempts by the bulls to approach the upper trendline have failed due to the supply zone between $ 0.63 and $ 0.65. Therefore, exhausting the pressure to buy the transfer token is fatal.
When that price swing falls through the lower trendline at $ 0.61, a new downtrend is triggered. This bearish step is supported by the formation of a bear flag on the 1-hour chart.
This setup is a continuation pattern that includes a large drop in the market value of XLM called the flagpole, followed by a consolidation called the flag.
A breakdown of the flag’s lower trendline at $ 0.62 signals the start of a 14% downtrend created by adding the height of the flagpole to the breakout point.
With this move, the XLM price is deep in the demand zone at $ 0.53, ranging from $ 0.55 to $ 0.50.
While the bearish scenario seems logical based on the multi-timeframe analysis, a potential increase in buying pressure due to an unforeseen event could violate the supply zone. Such a move would invalidate the bearish scenario and likely prompt buyers to move on.
In such circumstances, XLM price could rise 9.5% to hit the channel’s upper trendline at $ 0.71, which is in line with the breakout line on the Momentum Reversal Indicator.