Trading since Wednesday, December 18, has been an unwelcome reminder of the persistent volatility—perhaps even fragility—of even the strongest cryptocurrency bull runs.
Despite a significant decline that proved difficult to shake off by the time of publication on December 23, few investors and analysts believe digital assets have outperformed the cycle and, indeed, most now expect the rally to resume in the coming weeks and months.
Technical analysis (TA) applied to Stellar (XLM) by popular online expert Ali Martinez appears to support mid- to long-term optimism, and the token may essentially be poised for an imminent rally.
Why XLM is ready to rally
Specifically, in X’s Dec. 22 post, Martinez explained that a technical analysis tool called TD Sequential was sending a buy signal for XLM, offering a chance for a rebound to recent highs around $0.55—and possibly beyond.
TD Sequential is used to assess whether the current trend will continue or reverse, based on the asset’s historical performance.
Martinez, however, added that the prerequisite for such a rally is a stable hold above the critical support zone at $0.33. Fortunately for Stellar bulls, the token is trading somewhat comfortably above the level with XLM price at $0.35977 today.
Why a Soon XLM Rally Isn’t Guaranteed
However, it is worth noting that the sum of many technical analysis tools and indicators is not yet a decisive bullish factor for Stellar. For example, the relative strength index (RSI), despite the optimistic sentiment, remains relatively neutral at 43.78.
Some instruments, such as the volume-weighted moving average (VWMA) and the Hull moving average, remain fixed on the sell side.
Ultimately, despite the “buy” signal from TD Sequential, the real test of XLM is yet to come as the token approaches the nearest resistance level around $0.38 – an uncertain prospect at the time of publication, as the last 24 hours of trading have seen the price drop by 2 .07%.
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