Stellar’s XLM bounces 15% two days after hitting record low versus XRP
XLM price is playing catchup to XRP’s March gains, quickly rising 25% versus the U.S. dollar while the XLM/XRP pair bounces from record lows.
The price of Stellar (XLM) rebounded 15% versus its arch-rival XRP (XRP) two days after the XLM/XRP pair set a record low of 0.181.
Notably, the XLM/XRP pair rose to its intraday high of 0.20 XRP on March 31, coinciding with a decoupling between Stellar and XRP in the U.S. dollar market. For instance, XLM’s price has jumped over 11% since March 29 versus XRP’s 3% decline.
XLM price eyes 10% gains versus XRP in April
On a broader timeframe, XLM has dropped 89% versus its peak of 1.655 XRP in January 2021. Interestingly, the peak formed a month after the U.S. Securities and Exchange Commission sued Ripple for allegedly selling securities in the form of XRP tokens.
The SEC vs. Ripple case is now nearing its conclusion with legal experts favoring a win for Ripple.
Meanwhile, XLM continues its long-term downtrend against XRP, though a rebound in April is on the cards.
On the daily chart, the XLM/XRP’s ongoing recovery started at its multi-month descending trendline resistance, which constitutes a falling channel, as shown below.
The pair now looks toward flipping the 0.198-0.207 XRP resistance range as support to eye a run-up toward 0.22 XRP in April, up 10% from current prices.
XLM looks equally bullish versus the U.S. dollar
Stellar price rallied more than 25% in March to reach $0.113, its highest level in four months. XLM is now positioned for a potential short-term price correction in the first week of April, followed by a rebound rally to new yearly highs.
At the core of this bullish outlook is a classic technical pattern dubbed cup-and-handle. The pattern forms when the price undergoes a U-shaped recovery, or cup, followed by a consolidation period, i.e. the handle, all under a common resistance level called “neckline.”
Meanwhile, it resolves after the price breaks above the neckline and rises by as much as the distance between the cup’s bottom and neckline.
Notably, XLM has been painting a similar cup-and-handle since November 2022. XLM/USD entered the pattern’s breakout stage during its price boom in March and is now 20% away from reaching the breakout target near $0.131.
Nonetheless, XLM’s daily relative strength index (RSI) has entered its overbought zone above 70, suggesting a consolidation or correction period in the first week of April. As it happens, XLM price risks correcting toward its neckline at around $0.095, down 12% from current price levels.
Related: Why is XRP price up today?
Ideally, traders perceive such corrections as a method to analyze cup-and-handle’s breakout strength. So the breakout scenario will be confirmed when the price bounces from the neckline, accompanied by a rise in trading volumes.
Conversely, if the price closes below the neckline with a rise in volumes, it risks invalidating the cup-and-handle breakout scenario altogether.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
