XLM Price Action Suggests Stellar Rally May Be Cut Short as Token Nears Historic Resistance: 30% Dip Possible

The price of Stellar's XLM has increased by more than 30% in the past 6 days, raising hope for more bullish run.

Stellar's (XLM) price has rallied by more than 30% in the past 6 days, sparking speculation of a potential bull run. However, technical analysis suggests that the rally may be hindered by a historic resistance level, which could lead to a 30% dip in XLM's price.

According to TradingView, XLM's price has surged by 34% in the past 6 days, rising from a low of $0.08 on September 21 to trade at $0.10 on September 27. The token's price is now facing a crucial resistance at $0.11, which, if breached, could propel XLM's price to rally by an additional 10%.

However, if XLM's price fails to break above the resistance, it could encounter another hurdle at the 50-day simple moving average (SMA), which is currently situated at $0.09 on the daily chart. This could potentially contribute to a 30% dip in XLM's price from the top of the range, bringing it down to the 50-day SMA.

A broader perspective of price action reveals that XLM has been trading within a range, with $0.078 serving as the support and $0.112 as the resistance. Past price movements indicate that the rally might conclude at the resistance, much like it did in May and July, leading to another leg down.

However, price action suggests that the price may remain bullish if it breaks above the 100-day SMA (yellow line). Then, we could see a rally of around 10% to the key resistance level. If history repeats, then we may see Stellar's XLM dip by another 30% from the top of the range to the base.

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