Stellar (XLM) is breaking out strongly – A 100% increase is within reach!

The price of Stellar (XLM) has increased by over 11% in the past 24 hours, breaking a bullish continuation pattern (. Although many traders are anticipating a correction, some technical indicators suggest this could be the beginning of a much stronger bullish trend.

However, another on-chain indicator is signaling a warning about a risk that could slow down this process.

The intersection of 3 EMA lines signals a strong bullish wave

The 4-hour chart clearly shows the momentum of the trend, and this is where the crossing of the 3 EMA lines begins to show strength. The 20-period Exponential Moving Average )EMA( has crossed above both the 50 and 100-period EMAs; meanwhile, the 50 EMA is currently approaching a similar crossover above the 100 EMA.

![])https://img-cdn.gateio.im/webp-social/moments-fff0def9fba4e47e085e026c210391b9.webp(Stellar price chart and three-line crossover | Source: TradingViewEMA is a technical tool that helps smooth price data, assigning greater weight to more recent price levels. It reacts faster than SMA )simple moving average(. A "Golden cross" occurs when a shorter EMA crosses above a longer EMA, often used by traders to confirm a bullish reversal.

The last time this three-line crossover was set up was ) at the beginning of month 7(, the price of Stellar increased from 0.23 USD to over 0.52 USD, achieving a 122% increase. This setup creates strong technical momentum as the current price surpasses 0.46 USD, with 0.50 USD being the immediate psychological resistance and the range of 0.52–0.97 USD being the bullish extension.

Net cash flow indicates the risk of early profit-taking

The net flow chart for 1 week on spot exchanges shows a bullish breakout from just 724,000 USD last week to 9.12 million USD this week, an increase of over 1,159%. This index tracks the amount of XLM flowing in or out of exchanges. When the cash flow increases, it often signals that traders are moving tokens onto the exchange to sell.

![])https://img-cdn.gateio.im/webp-social/moments-bc00c53638ad20c466d180bc49291f97.webp(The XLM money flow chart has become bullish after several weeks of quiet | Source: CoinglassThis is not the first time this has happened. On June 23, 2024, the money flow also turned positive and the price of Stellar dropped from 0.26 USD to 0.24 USD shortly after. Another instance was on December 30, 2024, when a bullish money flow after several weeks of quiet led to a short-term price adjustment.

Therefore, although the technical setup appears bullish, traders should be cautious of the potential correction due to profit-taking pressure in the upcoming trading sessions.

Bull-Bear Power Indicator Confirms Upcoming Breakout

The breakdown of the pole-and-flag pattern on the daily chart further strengthens the bullish argument. The pattern starts with a strong bullish movement )pole(, followed by a leaning accumulation )flag(, and the breakout often leads to a new bullish wave.

![])https://img-cdn.gateio.im/webp-social/moments-0ea26bacc0a5d7cdcd5d83ec45271593.webp(Stellar price analysis chart | Source: TradingViewWhat makes this case stronger is the Bull-Bear Power index )BBP(, which has turned green once again. This index shows the difference between the highest price that buyers are willing to pay and the lowest price that sellers will accept. A green BBP during a breakout usually confirms that buying strength is returning.

With the pole measured from the bottom level of 0.23 USD to the top of 0.52 USD, a similar extension from the breakout candle brings the next price target for Stellar close to 0.97 USD, assuming the bullish trend continues. Note that this pole includes the price range of Stellar mentioned as part of the completed three-line crossover. To create a clear bullish trend, Stellar's price must break through 0.52 USD, the previous high or the highest point of the pole.

However, the short-term bullish hypothesis will be invalidated if the price of Stellar drops below 0.36 USD, mainly due to the increased selling pressure, as previously indicated.

Itadori