Main Takeaways
- XLM is targeting a 35% price increase, potentially reaching $0.63, as it breaks out of an ascending triangle chart pattern near $0.52.
- XLM demonstrates strong positive correlation with XRP, historically exceeding 0.70 during bull markets, suggesting it may benefit from XRP’s ongoing strength.
- The short-term XLM chart draws technical validation from veteran trader Peter Brandt, who notes the token’s prior near-single-digit aspirations.
XLM Forms Ascending Triangle Pattern
XLM is currently consolidating within an ascending triangle formation on the four-hour chart. This bullish technical pattern is defined by progressively higher lows and a flat resistance level near the $0.52 mark.
The ascetic is being tested repeatedly after the token issued notable gains surpassing $0.52 earlier this week. The establishment of consecutive higher troughs signifies accumulating buying interest at ever higher price levels.
A confirmed breakout above this $0.52 resistance would validate the bullish setup and trigger a potential price move toward $0.63, representing a roughly 35% increase from current prices.
Technical analysts measure price targets by adding the maximum vertical height of the triangle structure to the breakout point.
Oscillator indicators add credibility to this bullish thesis. The relative strength index (RSI) remains comfortably in unsold territory, indicating no immediate oversold or overbought concerns.
Furthermore, XLM has successfully maintained its position above key short-to-medium term exponential moving averages (EMAs) – specifically its 20-, 50-, and 200-period 4-hour EMA settings, all of which are currently showing upward momentum.
The technical structure finds support from comments by veteran trader Peter Brandt, who includes XLM among his more promising setups.
Brandt conditions his bullish thesis on a decisive close above the conspicuous $1 price level barrier, a formation XLM previously challenged but never ultimately breached with conviction.
XRP Correlation Provides Tailwinds
XLM continues its positive trend following exceptionally strong performance. Over the past month, the token saw price appreciation exceeding 90%, closely mirroring the roughly 60% gain registered by its “sibling” token XRP during the same time frame.
The relationship between the two assets shows depth beyond short-term swings. Considered over the period since late November, while XLM increased approximately 425%, XRP generated gains exceeding 590%.
This recent leadership by XRP creates a compelling case for XLM according to a catch-up rally pattern. Historically, this situation often presents itself when XRP initiates significant market moves.
A foundational technical reason for this strong link lies in their shared origins and similar applications focused on facilitating cross-border payments.
In the aftermath of shared significant market phases, historical data indicates the six-month XLM vs XRP correlation coefficient registers at better than 0.70.
For example, in July 2023, the positive US court ruling concerning Ripple’s status sent XRP surging by roughly 60%. XLM subsequently responded in kind – increasing by 60% plus – simultaneously pushing their correlation reading towards 0.95, signifying an outstanding alignment.
This established pattern continues to exert influence into the current phase, offering additional conviction to the view that XLM retains upside potential contingent upon the sustained strength of XRP into the remainder of the year.
About This Analysis: This content does not constitute investment advice or financial recommendations. Cryptocurrency and blockchain assets carry substantial risk. Always conduct independent research before making any investment or trading decisions.
