- Stellar price holds 0.618 Fib support at $0.36, completing the right shoulder of a bullish inverse head & shoulders pattern.
- A breakout above the $0.52 neckline confirms the pattern, opening targets at $0.67, $0.77, $0.84, and $1.10.
- Pattern invalidation occurs below $0.32, where the 0.5 Fibonacci support level resides.
Stellar price is on the verge of a significant bullish turnaround and the charts could not be any more on point. The inverse head and shoulders pattern is already forming with a hint of break out following several months of consolidation. The recent price zone is an attractive entry point with solid Fibonacci support at the current price of $0.36. This arrangement could trigger an influx towards the $1 mark and beyond in the near future, should this be validated.
Inverse Head and Shoulders Pattern Signals Potential Breakout Toward $1
The daily chart shows Stellar seems to be forming a textbook Inverse Head and Shoulders pattern, which is a strong bullish reversal indicator. As analyst Ali Charts notes, this is a great place to begin purchasing Stellar price until it breaks out to $1! The recent price of approximately $0.36 is perfectly in line with the Fibonacci retracement of $0.618 which has in the past served as a good support area in bullish consolidations.
The trend comprises a Left Shoulder created in January, a Head with the lowest point in April and a Right Shoulder that is currently being created in the beginning of September. This formation is gaining form immediately below the neckline at $0.52, which is the main resistance level.
An upside breakout above the neckline of $0.52 by bulls would prove the IH&S breakout with Fibonacci extensions to the levels of $0.67, $0.77, $0.84 and possibly even $1.10. These are the $1.272, and 1.786 Fib extensions respectively.
The bears would have to break below the 0.5 Fib retracement at $0.32, which is the support, in order to invalidate the pattern. But as long as XLM price stays above this point, the bullish structure still exists.
The arrangement offers an attractive risk-to-reward profile, particularly to swing traders who want to place a position in anticipation of a potential breakout. An upward confirmation above $0.52 would probably bring in momentum buyers and start to pick up the uptrend. Monitor volume spikes and day close above major resistance.
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