The Stellar (XLM) price readings from long- and short-term time frames are in alignment and indicate that another final drop is expected prior to a bullish trend reversal.
The technical analysis from the weekly time frame provides a bearish outlook. The Stellar price has decreased since reaching a high of $0.80 in May 2021. The downward movement accelerated after the price created a lower high in Nov. of the same year (red icon).
So far, the XLM price reached a low of $0.079 last month. After a weak bounce, it is approaching the same level once more.
The weekly RSI is falling and has not confirmed any bullish divergence yet. As a result, the most likely Stellar price prediction is another drop towards the $0.078 support area.
The $0.078 area is crucial since it is the final support area prior to the March 2020 lows. So, a breakdown below it could trigger a sharp fall.
As a result, whether the Stellar price breaks down from the $0.078 support area or breaks out from the resistance line will likely determine the future trend.
Stellar Price Trades in Bearish Pattern
The short-term six-hour chart also provides a bearish outlook. The reason for this is that the Stellar price is trading inside a descending triangle, which is considered a bearish pattern. The support of the triangle is at $0.083.
A breakdown from it would confirm the pattern and likely lead to an XLM price decrease to the long-term $0.078 support area.
Conversely, a breakout from the short-term resistance line would invalidate this bearish price forecast.
Short-Term Count Supports Another Drop
Finally, the wave count also gives a bearish outlook.
Measuring from Oct. 9, it seems that the Stellar price is stuck in a five-wave decrease. If so, it is currently in wave four, which took the shape of a triangle. The sub-wave count is given in red. It suggests that after a short-term bounce, the Stellar price will break down from the triangle and complete the correction.
The Fib retracement on wave four predicts the price target of $0.075, very close to the long-term $0.078 horizontal support area.
If the price breaks out above the sub-wave C high at $0.091, it will invalidate this bearish wave count.
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