Stellar (XLM) Sees 12.38% Weekly Drop, Bullish Divergence Sparks Hope

Stellar (XLM) has recently shown signs of a significant shift in momentum, with the cryptocurrency currently trading at $0.2358. Despite experiencing a 12.38% weekly drop and a 5.96% monthly decline, the emergence of a bullish divergence has sparked renewed optimism among analysts. This pattern suggests a potential reversal, especially as XLM approaches a critical support zone between $0.221 and $0.209. If this support holds, it could signal a significant turnaround for the cryptocurrency, with price predictions aiming for $0.50 in the coming weeks.

Technical analysts are closely monitoring a falling wedge pattern, which is typically associated with bullish outcomes. This pattern, combined with the Moving Average Convergence Divergence (MACD) displaying a bullish divergence, has fueled speculation about a potential price surge. While the broader market remains cautious, these technical indicators are contributing to increased buying pressure. As the wedge narrows near the support zone, traders are hopeful for a smooth breakout that could push XLM's price toward the $0.50 target.

The support zone between $0.221 and $0.209 is crucial for Stellar, as it has historically served as strong support during market corrections. Analysts agree that holding above this level is essential for bullish sentiment to return. Volume indicators suggest increased accumulation in this area, which could serve as a launchpad for an upward movement if overall market conditions improve. A bounce from this support level would reinforce the potential for an upward trend following the bullish divergence.

Well-known crypto analyst Andrew Griffiths identified the bullish divergence in the MACD chart for Stellar, suggesting an achievable upward breakout. This divergence occurs when the price decreases while the indicator forms higher lows, indicating that selling pressure is fading. Griffiths believes that this setup, along with the falling-wedge pattern, could push prices notably higher if a breakout occurs. Another analyst, known as “Man of Bitcoin,” has also cited the technical boundaries forming around XLM, acknowledging clear buying and selling patterns that help traders manage their entries and exits.

The presence of a bullish divergence on the Stellar MACD chart is influencing short-term market sentiment. As one of the most widely followed momentum indicators, the MACD is often considered a primary indicator of price changes. In XLM, this divergence supports the notion that a reversal may occur, particularly close to strong support levels. Technical traders typically look for such divergences when assessing whether a trend is over and whether a new one may begin.

If the bullish divergence leads to a breakout, it could set a new market narrative for Stellar (XLM), which has lagged in recent months. Investors who became cautious may return with renewed optimism, particularly as the technical setup aligns with historic rebound patterns. However, confirmation is key; without breaking above the wedge’s upper trend line and sustained volume, the divergence remains speculative. Market watchers are increasingly hopeful of a breakout that justifies this bullish stance.

With all eyes on the $0.221–$0.209 support range, traders are preparing for both a breakout and a renewed downside. As the falling wedge tightens and volume builds, a decisive move can occur. If Stellar (XLM) manages to break above the upper level, the target of $0.50 might not be far. Given the broader market volatility, traders are advised to remain cautious but prepared for quick action based on pattern confirmations. Both long-term traders and short-term speculators are monitoring the same technical levels. A profitable breakout driven by bullish divergence would solidify XLM’s position in the altcoin market and bring renewed interest to mid-cap cryptocurrencies.