The price of Stellar, a popular cryptocurrency created by the co-founder of Ripple, has risen by more than 450% as the crypto bull run accelerates. However, Stellar is now showing signs of fatigue as its momentum to $1 hit a roadblock. Still, crypto analysts believe Stellar has room to rise as the altcoin season begins.
Stellar Price Analysis: Early Signs of a Bullish Pennant
On Tuesday, November 3, Stellar was trading at $0.55, down 15% from its November high. On a positive note, the coin is showing signs of forming a bullish pennant chart pattern, which is a popular signal for continuation. The pennant is characterized by vertical lines and a symmetrical triangle pattern.
Most of the time, this pattern tends to result in a strong bullish breakout, especially when supported by high volume.
XLM price has also broken above the 50-week and 200-week exponential moving averages (EMA). It is also holding above the key psychological level of $0.50 and the resistance of $0.4400, which was the highest level in November 2021.
Stellar’s market value to relative value (MVRV) ratio has slipped to 2.7, but remains well above its lowest level this year. The metric remains below the extreme level of 6 reached in 2021.
Therefore, if Stellar breaks out of its year-to-date high of $0.6347, it will confirm further gains. A breakout of this level will indicate that there are more bulls in the market and they will be keen to push it to its all-time high of $0.80. If Stellar breaks out of this resistance, it will confirm a move to $1.
On the other hand, a break below the $0.4402 support (November 2021 high) would invalidate the bullish view. Such a move would increase the likelihood of mean reversion, a scenario where an asset falls to its mean. If this happens, the XLM price could drop to the critical support of $0.20, which was the highest level in July 2023.
XRP will determine the next move of XLM price
Whether Stellar’s price will jump to $1 will depend on the next price movement of Ripple. This is because the two cryptocurrencies are usually closely correlated as they both belong to the payment industry. In addition, Stellar was founded by Ripple co-founder Jed McCaleb.
Both currencies have seen a surge in price due to Donald Trump’s recent victory and upcoming changes at the U.S. Securities and Exchange Commission (SEC). Analysts expect Ripple’s legal troubles to end soon, creating conditions for a potential XRP ETF. Similarly, Canary Capital has applied for a spot XLM ETF, which could be approved in 2025, thereby attracting more institutional investment.
Therefore, when Ripple continues its bullish trend, the possibility of XLM token reaching $1 will increase.