Stellar (XLM) Forms Right Shoulder of Bullish Inverted Head-and-Shoulders Pattern

Stellar (XLM) has been consolidating within a narrow range of $0.4102–$0.4284 over the past 24 hours, indicating a period of market indecision and accumulation. The price action suggests the formation of the right shoulder in an inverted head-and-shoulders pattern, a classic technical indicator often associated with bullish reversals. The pattern’s left shoulder was formed earlier in the year, while the head developed near $0.20–$0.22 in June. The current price consolidation around $0.34–$0.36 is shaping the right shoulder [1]. Analyst Ali (@ali_charts) has highlighted this development, noting that the neckline resistance lies around $0.49–$0.50, a critical level that, if broken, could signal a more significant upward move [1].

Despite attempts to push above $0.428 in recent sessions, selling pressure has limited gains, pushing the price back down to the $0.412 level. This behavior suggests a bearish sentiment in the short term, with traders locking in profits and avoiding further risk. However, the ability of the price to stay above the $0.41 level indicates that buyers remain active and are defending key support. This tug-of-war between buyers and sellers is characteristic of consolidation and reflects a market in balance, where neither bulls nor bears are able to gain a clear advantage [1].

The $416 million in trading volume over the past 24 hours underscores the active interest in Stellar, highlighting the liquidity and stability of the asset. This level of participation supports the integrity of the forming technical pattern and reduces the likelihood of sudden, illiquid price swings. The high volume at key price levels also signals that both buyers and sellers are treating these levels seriously, reinforcing their psychological importance [1].

On a broader scale, the accumulation phase visible in the pattern suggests that market participants are positioning themselves ahead of a potential breakout. The neckline at $0.49–$0.50 is the key barrier to watch, as a confirmed break above this level could validate the pattern and initiate a larger bullish trend. In the short term, resistance is forming at $0.428–$0.430, and a daily close above this level on strong volume could signal a move toward $0.44–$0.45 [1]. Conversely, a breakdown below $0.41 could trigger a retest of the $0.405 or $0.398 levels, which are considered near-term support zones.

Stellar’s market capitalization currently stands at $12.92 billion, with 31.35 billion tokens in circulation out of a maximum 50 billion. This controlled supply structure provides a degree of stability in the long term, distinguishing it from projects with unlimited supply models that carry higher inflation risks [1]. The active trading volume further supports the idea that the market is in a period of price discovery, with technical signals becoming more reliable as liquidity remains robust.

The ongoing consolidation and pattern formation are consistent with a larger bullish thesis, provided the key technical levels are respected. The pattern’s validity will ultimately depend on whether the neckline at $0.49–$0.50 is breached, a development that could unlock new price territory for Stellar in the coming weeks [1].

Source: [1] Stellar (XLM) Consolidates as Right Shoulder of Inverted Head-and-Shoulders Pattern Takes Shape (https://cryptofrontnews.com/stellar-xlm-consolidates-as-right-shoulder-of-inverted-head-and-shoulders-pattern-takes-shape/)