Stellar (XLM) forms bullish pennant ahead of potential price surge

Stellar (XLM) is forming a textbook bullish pennant pattern on its price chart, signaling potential upward momentum in the coming weeks. The token is currently consolidating within a tight range, bounded by converging trendlines, following a strong upward move that pushed its price to around $0.40. This pattern is often seen as a precursor to a continuation of the bullish trend, with traders closely monitoring the upper trendline as a key resistance level [1].

The consolidation phase reflects a period of market indecision, yet on-chain data shows that institutional interest is growing. Smart money—large traders or institutions—is quietly accumulating XLM, a historical indicator often linked to subsequent price surges. Meanwhile, retail activity remains subdued, a trend that has historically preceded major rallies for the asset [1].

The bullish setup is further supported by fundamental developments, including Stellar’s recent integration into Visa’s blockchain settlement network. This partnership allows stablecoin transactions to be processed on the Stellar network, aligning with the project’s long-term goal of enhancing cross-border payment efficiency. The move places XLM in direct competition with XRP, which remains under regulatory scrutiny in the U.S. [1].

From a technical perspective, the Relative Strength Index (RSI) has dipped to 52 on the daily chart, exiting the overbought territory and suggesting room for a potential rebound. Key support levels between $0.40 and $0.36 have seen consistent buying pressure, with the 50-day EMA at $0.35 acting as a critical stop-loss threshold. A break below this level would invalidate the bullish pennant pattern and could trigger a deeper correction [1].

In the derivatives market, the long/short ratio for XLM has climbed to 1.14, its highest in over a month, indicating growing optimism among traders. The positive funding rate of 0.0085% further supports the dominance of long positions, reinforcing the bullish sentiment. If the price successfully breaks above the upper trendline, it could target the July 18 high of $0.52, with a potential move toward the November 2023 high of $0.63 [1].

While the broader altcoin market remains volatile, XLM’s structured and controlled movement stands in contrast to the erratic behavior of speculative assets like BONK. Analysts caution, however, that the bullish pennant is not a guarantee of a breakout and should be interpreted in conjunction with other technical and fundamental signals [1].

Source: [1] Stellar (XLM) August outlook as bullish pennant forms (https://invezz.com/news/2025/07/31/stellar-xlm-august-outlook-as-bullish-pennant-forms/)