Stellar’s price has struggled in recent months, remaining down about 34% over the past three months. Despite this broad downtrend, recent price movements have been stable, with XLM trading almost sideways over the past 24 hours. Beneath the surface, there are some signals that suggest the weakness may be losing strength rather than accelerating.
At the same time, Stellar’s actual usage is increasing. Capital continues to flow into the network, buying on the downside is active, and a bullish chart structure is forming. Stellar’s real-world value is now approaching $1 billion, and the price is nearing a key decision point.
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Bullish price pattern forms as actual usage increases
Stellar has formed an inverted head-and-shoulders pattern on the daily chart, and this structure is often seen near market bottoms. This pattern shows that buyers intervene early on each dip, while selling pressure gradually wanes. The left shoulder was formed in November, the head was printed in late December, and the right shoulder was formed with a recent pullback.
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This structure started to take shape after December 31st, when Stellar rose nearly 30% and then corrected from January 6th to January 9th. This correction did not break the trend.
Instead, it helped reshape my right shoulder. The neckline of this pattern is approximately 12% above the current price. A breakout will be confirmed if the daily closing price rises above this level.
What powers this setup is actual network growth. Stellar’s real-world asset value increased from about $890 million (as of Dec. 31) to about $986 million in early January. This is an increase of approximately 10.8% in a short period of time, and the network is approaching the $1 billion mark.
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This increased usage helps explain why the price has stabilized rather than collapsed, giving the bullish pattern a solid foundation.
Capital inflows and market buying support the structure
To understand why this pattern persists, it helps to look at capital flows. Chaikin Money Flow (CMF) measures whether money is flowing in and out of an asset.
If the CMF remains above zero, it indicates that there is more inflow than outflow. In the case of Stellar, the CMF remains positive despite the price drop in recent weeks.
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This indicates stable capital inflows rather than distributions. That behavior is very consistent with Stellar’s real-world asset value increase. Funds flowing into the network are also visible in price data, suggesting large participants are building positions during the downturn.
Buying on the downside can also be confirmed by the Money Flow Index (MFI). MFIs track buying and selling pressure using both price and volume. From late November to late December, Stellar prices hit new lows. During the same period, MFIs maintained higher levels and continued to rise. This shows that buyers are consistently pushing in rather than abandoning their positions.
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This bullish buying behavior will remain in place as long as MFI remains above the 36 level. Buyers are still absorbing selling pressure, which is helping support the right shoulder of the pattern.
Levels that determine whether Stellar price will go even higher
The technical price level of Stellar in the future is clearly defined. A daily close above $0.254 (previously established 12% theory) would confirm an inverted head-and-shoulders breakout, paving the way to the $0.330 area, which represents the expected 30% upside from the neckline.
On the downside, $0.223 is the first level to watch. If the daily close is below this, the bullish structure will weaken. A deeper close below $0.196 would result in a break below the head and invalidate the pattern completely.
For now, Stellar price has been compressed between steady capital inflows, aggressive bullish buying, and a clear breakout level overhead. Usage on the network continues to increase despite low prices. Whether XLM rises further now depends on one question: Can the price keep up with the capital already flowing into Stellar’s network?
