Stellar (XLM) is at a critical technical juncture, testing a major supply zone at $0.261 while its underlying network sees significant growth in real-world asset (RWA) value, now approaching $1 billion. The token has gained 7% recently, moving closer to breaking out of a prolonged consolidation phase within a flag pattern.
The $0.261 level has historically acted as strong resistance, capping multiple upside attempts over recent months. Bullish sentiment is currently dominant, with data showing long positions nearly tripling short positions, resulting in a Long/Short Ratio of 2.769. A breakout above this resistance is seen as essential for confirming a short-term trend shift and potentially ending the months-long consolidation.
Supporting the bullish case is the formation of an inverse head and shoulders pattern on the daily chart, a structure often associated with market bottoms. The neckline of this pattern sits approximately 12% above the current price, around $0.254. A daily close above this level would confirm the breakout and open a path toward the $0.330 area, representing a potential 30% upside.
Fundamentally, Stellar's network utility is strengthening. The total value of real-world assets on the Stellar network surged from about $890 million on December 31 to roughly $986 million in early January, a 10.8% increase in a short period, bringing it close to the $1 billion milestone. This growth in real usage is underpinned by steady capital inflows, as indicated by a positive Chaikin Money Flow (CMF), and persistent dip-buying activity, with the Money Flow Index (MFI) holding higher levels even during price declines.
Key technical levels to watch include $0.254 as the breakout confirmation and $0.223 as the first major support. A close below $0.196 would invalidate the bullish pattern. Liquidity data also shows a cluster of 304.15K XLM around $0.2683, which could act as a magnet for price if resistance is broken. The coming days are pivotal for XLM's near-term direction, balancing strong technical positioning against a key historical resistance level.
