XLM price struck at the 61.8% retracement support level yesterday before rebounding to close positive on a day that initially looked bearish for the cryptocurrency complex. Until XLM can close above yesterday’s bullish hammer candlestick pattern level, the outlook is neutral.

The May 19 and 23 Stellar price plunges dismantled the 50-day SMA, the channel’s lower trend line support level, thereby evacuating the weak holders and prominent pockets of anxiety. The digital asset’s response to the remarkable declines was an almost 80% rally from the May 19 low to the May 20 high and a 70% price rebound from the May 23 low to the May 26 high.

XLM price forms a bullish hammer candlestick pattern

From May 20 until May 30, Stellar XLM price structured a symmetrical triangle pattern that briefly resolved to the upside on May 31 before striking the channel’s lower trend line resistance level and slipping in a tight consolidation for two days. Since June 4, Stellar XLM has declined around 25%, but the drop is not characterized by a stampede to the Coin exits. Trade Volume has remained emphatically low, nowhere near the 50-day average.

Yesterday’s XLM rebound and close with a hammer candlestick pattern materialized from the 61.8% retracement level of the 2020-2021 advance at a price of $0.320 and slightly above the May 19 low at $0.300.

A daily close above yesterday’s high of $0.356 will trigger the hammer candlestick pattern and free XLM price to immediately test the 200-day SMA at a price of $0.375. If XLM closes above the June 7 high at a price of $0.392, investors could incrementally add to their original pilot position from the bullish hammer trigger.

Stellar price will not commence a far-reaching rally until it liquidates the channel’s lower trend line, currently at a price of $0.462 and the 50-day SMA at $0.497. A Stellar price rally to the channel’s lower trend line would constitute a 30% from yesterday’s hammer high.

Stellar XLM Fibonacci levels at price of $0.536 and $0.597 may temporarily diminish the strength of the rally.

If XLM fails to trigger the hammer high, Stellar price may decline to the May 23 low at $0.274. However, the inherent support level composed by the May 19 low, May 23 low, and the 61.8% retracement level offers conclusive support for any further Stellar weakness.

Of course, a new tidal wave of sustained selling pressure could strike the cryptocurrency market, which may jeopardize the support level and leave XLM price exposed to a test of the 2020 rising trend line at a price of $0.186, equalling a 45% drop from the current price.

Stellar XLM rests at a short-term pivotal price level. Still, with a formidable support layer just below, the XLM price is well-positioned to withstand any further residual selling pressure that may emerge moving forward, creating a solid opportunity if the XLM does close above $0.356.

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