Following a couple of weeks in a narrow trading band, Stellar’s native coin, XLM, is again gaining attention in the crypto market. The Stellar price has been moving in a range of $0.343 to $0.520. However, technical indicators are starting to suggest that this period of stability might be beyond periodic sideways action.
According to market watchers, these lengthy compression periods are usually followed by sharp changes in direction. An example of a voice that most closely verifies this possibility is Ali Martinez, a well-known crypto analyst with a following of over 150,000 on X. He has termed the present consolidation as a possible accumulation phase that may be immediately followed by a breakout towards the $1 mark.
Stellar Price Chart in Talks as Analyst Identifies Major Buying Zone
Stellar blockchain has long been known as a network that is meant to support fast and cheap cross-border transactions. However, over the recent weeks, attention has shifted from its utility to its structure in the market. Analysts observe that the existing Stellar price band is acting as a highly compressed spring. The tighter the price, the more energy that is contained and would be unleashed once a directional trend has formed.
Martinez has even referred to this zone as a perfect place to trade, and emphasizes that it coincides with one of the most effective reversal patterns in charting: the inverse head-and-shoulders. The trend has taken a particular step-by-step approach.
The first shoulder was chopped during a previous retreat of the XLM price. This was then trailed by a deeper trough, the head, in April. Since that time, Stellar has recovered and drawn a second shoulder at or close to the $0.36 level.
Such a formation is closely monitored as it is usually an indication that a lengthy downward trend is approaching its limit. The critical test is at the neckline, which, in the case of Stellar, is near 0.50. Many traders believe that a strong move above this level is the signal that will justify the arrangement. In the past, these patterns have been followed by strong rallies in several assets.
Fibonacci Levels Show Positive Outlook
To further support the analysis, Martinez has used Fibonacci retraction and extension levels. These ratios are based on mathematical progressions found throughout nature and finance and are commonly used to determine possible points of inflection in markets.
The breakout level of $0.50 in the chart of Stellar overlaps a major retracement zone and is a technically important barrier. If XLM breaks through this ceiling, Fibonacci estimates that it encounters intermediate resistance at 0.70 and 0.80, with the symbolic 1 representing the more ambitious extension. These levels are not considered certainties but are more like checkpoints at which traders expect breaks or accelerations in the pace.
Martinez compared those levels to the marks on a ladder in the dark: they do not show where one will go but give one an idea of when the next step will be visible. Such an arrangement has been observed with other digital assets, prior to sharp rallies.
Some point to Solana, which once traded close to $0.50 before going on a run into the double-digit territory. Although two markets do not precisely match, the analogy has prompted speculation that Stellar might be about to do the same thing.
As XLM currently trades within a narrow range between $0.343 and $0.520, based on an inverted head-and-shoulders foundation, and in line with the Fibonacci levels that stretch up to $1, the market is keen to find out whether the asset will conform to the pattern that technical indicators have pointed to.
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