Stellar (XLM) has been incurring massive upside throughout the past couple of weeks, with the token’s price surging to fresh yearly highs just days ago.
It is currently expressing some signs of weakness, however, as the token’s price recently faced a grim rejection that has since sparked an intense price decline.
Analysts are noting that this ongoing breakdown could ultimately result in a full retrace that causes it to reel back down to around where its latest parabolic push higher first began.
Despite this, some analysts are remaining firmly bullish on the cryptocurrency’s mid-term outlook, noting that it could be poised to see further upside despite the weakness it has been showing in recent times.
One trader notes that Stellar could soon push as high as $0.13 if it is able to defend a crucial support level.
If this bullish scenario does come to fruition, it would mark an over 50% climb from the cryptocurrency’s current price.
Stellar (XLM) Shows Signs of Forming a Local Top as Breakdown Begins
At the time of writing, Stellar is trading down over 6% at its current price of $0.085. This marks a notable decline from daily highs of $0.096 that were set earlier this week when the cryptocurrency peaked.
From here, it has been sliding lower ever since and is showing few signs of finding any major support.
Earlier this morning, the crypto was able to bounce at $0.083, signaling that there may be some slight buying pressure here that slows its descent.
Stellar peaked alongside most other altcoins, as the past week has proven to be incredibly positive for the aggregated market.
Bitcoin’s long-held bout of sideways trading has provided an ideal backdrop for altcoins to surge, although its recent rejection at $9,500 has tempered the strength many smaller tokens have seen.
One analyst is now noting that Stellar appears to be flashing some signs of breaking down following its rejection at its recent highs.
“XLM: Looks like breakdown is the name of the game right now for many alts. I had high hopes for Stellar too, as there was a real opportunity to hit 50% to 70% if Bitcoin continued trending up. XLM needs to hold this level, as it could head back down between 825 to 860 sats,” he said.
Image Courtesy of Josh Rager. Chart via TradingView.
Why One Trader Thinks XLM Is Just Making a “Healthy Correction”
Other analysts are remaining bullish on Stellar’s outlook.
One recently said that he believes this pullback is simply a “healthy correction” – adding that the support at its current price level could allow it to surge back up towards $0.13.
“I think, this one is just making a healthy correction after a big breakout (on the BTC pair) and we’ll be ready for continuation towards $0.13,” he explained.
Image Courtesy of Crypto Michael. Chart via TradingView.
Bitcoin’s near-term price action will likely hold heavy influence over that of altcoins like Stellar.
Featured image from Shutterstock. Charts from TradingView.