The chart illustrates a potential bullish setup forming on the daily timeframe of the Stellar/USDT perpetual contract on Binance.
After a prolonged downtrend, the price action has formed a clear double bottom pattern (W-shape), signaling a potential reversal. The neckline of the pattern has been broken and successfully retested, confirming the validity of the formation. Following this retest, XLM has continued to respect the ascending trendline, indicating sustained bullish momentum.
Currently, the price is consolidating just above the trendline, providing a potential long entry opportunity. The designated support area around $0.29725 acts as the key invalidation level. Should the price break and close below the $0.25211 zone, the bullish structure would likely be compromised, potentially leading to a trend reversal.
The target for this setup lies within the resistance zone between $0.38 and $0.40, an area that historically acted as strong supply. This zone is marked as both resistance and a take-profit area. Given the significance of this level, a partial profit-taking strategy is advised once price approaches this zone.
Volume analysis shows moderate participation during the recent leg up, which could suggest the need for higher volume confirmation on any breakout attempts.
The RSI indicator remains in neutral-bullish territory (around 56–58), suggesting that there is still room for upward movement before entering overbought conditions.
Conclusion:
As long as the ascending trendline holds, the structure remains bullish. A break above recent highs with increased volume could pave the way for further upside toward the $0.38–$0.40 region. However, a breakdown below the support zone would invalidate the long thesis and may warrant reassessment or potential short setups.
Risk management and dynamic stop-loss tracking are essential in this volatile range.