The price of Stellar (XLM) has rebounded in the last 24 hours; however, the technical indicators still show some bullish reversal signs. Traders are focused on the critical support level of $0.40 to maintain upward momentum, making the targets of $0.5666, $0.6242, and $1 the center of attention.

Analysts point out that strong technical patterns and increasing blockchain adoption are the driving forces behind XLM's rise.

Technical analysis of XLM price

The breakout of the descending wedge is a key point in the price movement of XLM. The level of $0.40 is a good entry point for buying, with potential targets of $0.5666, $0.6242, and $1. This setup is a bullish continuation, meaning a breakout above $0.45 will signal the continuation of the upward trend.

If this trend continues, XLM may reach its 52-week high. They note that this breakout aligns with the generally optimistic sentiment towards major altcoins, especially those that can be used in the real world, like Stellar.

Formation of the bullish flag for XLM

The XLM/USDT 4-hour chart presents a bullish flag formation, which is a reliable continuation signal.

This formation consists of a sharply rising trend (known as the flagpole), followed by a consolidation phase between two downward-sloping trend lines. This setup indicates that once the consolidation ends, the price is likely to break out in the direction of the previous trend.

Based on the height of the flagpole, the chart predicts the next target at $0.50. Additionally, the RSI is at 46.50, moving upward from the neutral zone, indicating increased buying interest. These signals suggest that if the price breaks through the upper boundary of the flag, there is a significant chance for further gains.

Key support and resistance levels for XLM tokens

As XLM approaches important price levels, these levels are crucial. The $0.40 level is vital for supporting further upward movement. Meanwhile, $0.42 serves as the bottom of the bullish flag. If the price cannot maintain above these levels, it may test another level identified by analysts at $0.35.

In terms of resistance levels, $0.45 is seen as the next breakout level to confirm the bullish trend. If the price breaks above this level, XLM could easily rise to $0.50 and $0.60 in the short term. If the uptrend continues, analysts have also set higher target prices of $0.80 and $1.

Market sentiment and Stellar's role in the blockchain

Due to its outstanding performance in the blockchain development sector, Stellar has gained positive market sentiment. The current positive price movement of XLM is related to its involvement in CBDC and cross-border payment systems.

For example, providing the ability to convert prepaid SIM cards into digital debit cards. These showcase real blockchain solutions.

The 35% weekly gain of XLM has garnered widespread attention. After a recent transfer of $36 million worth of XLM to exchanges, short-term price fluctuations may occur. This activity suggests that long-term holders are taking profits after Stellar has appreciated 300% in the last three months.

The market remains optimistic, believing that if the current upward trend continues, XLM may reach $1 this quarter. This positive outlook encourages that maintaining the current momentum could push XLM to hit the $1 mark within this timeframe.