Stellar’s XLM has surged by over 90% over the past month, making it one of the standout altcoin performers in recent weeks.
While Bitcoin (BTC) and other top assets have cooled off with a modest pullback and price consolidation, XLM is flashing fresh bullish signals that could pave the way for another explosive rally.
XLM Forms Bullish Pennant as Traders Bet Big on Breakout Rally
On the one-day chart, XLM has formed a bullish pennant. This pattern emerges when a strong upward price movement (flagpole) is followed by a period of consolidation that resembles a small symmetrical triangle (the pennant).
XLM Bullish Pennant. Source: TradingView
This pattern usually suggests that buyers are temporarily pausing before potentially continuing the uptrend. Traders often look for a breakout above the pennant’s upper trend line as a signal to enter a long position.
On-chain data confirms the likelihood of an XLM upward breakout above this pennant in the near term. For example, the token’s funding rate remains positive, indicating the demand for long positions. Per Coinglass, this is at 0.0152% at press time.
XLM Funding Rate. Source: Coinglass
The funding rate is a periodic fee exchanged between long and short traders in perpetual futures markets. It keeps contract prices aligned with spot prices. A positive funding rate means traders are paying a premium to hold long positions, indicating bullish market sentiment.
For XLM, the positive funding rate shows that its futures traders are leaning heavily toward long positions. This reinforces the bullish pennant setup, signaling confidence in a continued price rally.
XLM’s Bullish Pennant Points to Massive Move
These indicators signal that XLM may be preparing for a fresh leg of gains. If demand strengthens and XLM successfully breaks out of the bullish pennant pattern, traders can expect a strong upward move.
Usually, when an asset breaks out of this pattern, its price is expected to grow by the length of the initial price surge—or “flagpole”—that preceded the pennant formation. This means that XLM’s price could potentially climb to $0.73.
XLM Price Analysis. Source: TradingView
However, if market sentiment shifts from bullish to bearish, XLM’s value may break below the pennant and fall to $0.39, invalidating the bullish outlook above.
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