Stellar (XLM) Price Shows Early Signs of Recovery After Breaking Key Support

Stellar's price action has been pretty rough lately, but there might be a silver lining emerging. After XLM took a beating and crashed through some major support levels, we're now seeing what could be the first signs of a potential comeback. The question is: will this bounce actually stick, or are we just seeing another fake-out before more pain?

XLM Price Breaks Down But Bulls Fight Back

Stellar (XLM) recently confirmed what many traders were already fearing - a nasty breakdown below the crucial $0.4050 and $0.3783 support levels. This wasn't just a quick dip either; it was part of a sustained downward trend that's been grinding lower for about a week now, as you can clearly see on the 1-hour chart.

The selling pressure was relentless, pushing XLM all the way down to around $0.3700 before buyers finally stepped in. But here's where things get interesting - instead of continuing to crater, XLM has actually started to recover. The price is now sitting at $0.3978, which represents a decent +0.76% gain in the most recent session.

This bounce is definitely catching some attention because it suggests the bulls might be trying to wrestle back control from the bears. Of course, we've seen plenty of these "dead cat bounces" before that ultimately lead nowhere, so traders are being cautiously optimistic at best.

Key XLM Price Levels That Could Make or Break the Recovery

Now that XLM is showing some signs of life, everyone's watching the resistance levels like a hawk. The first major test is going to be around $0.4050 - the same level that just acted as support before it got smashed. If XLM can actually break back above this level with conviction, it would send a pretty strong signal that maybe the worst is behind us.

Beyond that, the next big target sits around $0.4400, and if we're really dreaming big, there's potential for a move toward $0.4685. These aren't just random numbers either - they line up with previous consolidation zones where we've seen buying and selling interest in the past.

But let's be real here - if this recovery attempt fails and XLM can't hold these gains, we could easily see another leg down. The chart suggests potential targets near $0.3700 again, or even worse, a drop toward $0.3537. The next few trading sessions are going to be absolutely critical for determining which way this thing goes.

Bottom Line

According to trader analysis making rounds on social media, Stellar has basically played out its bearish scenario and might now be setting up for a potential reversal. With XLM hovering around $0.3978, the market is in a bit of a wait-and-see mode. Will this bounce turn into something meaningful, or is it just another lower high before the next leg down? Only time will tell, but the setup is definitely worth watching closely.