XLM Rebounds at $0.16: Multi-Year Resistance Finally Cracked?

 Key Insights:

• XLM retests $0.16 after liquidation drop, aligning with major moving averages and channel midpoint.
• Long liquidations dominated recent activity, suggesting overleveraged bullish sentiment triggered by price drops.
• Fibonacci targets hint $2–$8 range, but only if $0.16 support confirms as stable breakout level.

Stellar (XLM) was trading at $0.3117, reflecting a 5.2% decline in the past 24 hours and a 5.9% drop over the past week. The recent downturn follows a sharp liquidation move that brought the asset back to a previously marked support area. This zone, located around $0.16, aligns with the 100-month simple moving average and the midpoint of the Gaussian channel on the long-term chart.

The current price action suggests that XLM may be in a phase of retesting this level, which had served as multi-year resistance in the past. The return to this area has raised attention among traders who see it as a possible flipped support. The next few weeks are expected to be key in confirming whether this zone holds under selling pressure or breaks again.

Liquidation Trends and Market Behavior

Data from Coinglass shows a sharp imbalance between long and short liquidations over recent months. Total long liquidations reached $50.02K, while short positions saw $12.03K in liquidations. The liquidation chart shows two main spikes: one in mid-July and another in early October, both following sharp price moves.

The larger spike occurred in early October, reflecting a wave of long position liquidations triggered by a fast price drop. This also marked the point where XLM retraced back to the $0.16 area. The pattern shows that most traders were holding long positions during this period and were caught off-guard by the drop in price.

Technical Structure and Support Testing

The pullback to $0.16 has brought XLM back to a price area with historical importance. This level was previously a multi-year resistance zone, and its current retest may determine whether it transforms into a stable support. The area holds technical relevance due to its alignment with key moving averages and mid-range levels on longer-term indicators.

Chart analysts note that the previous breakout above this zone could point to a trend shift. As seen in other market cycles, price action often revisits breakout zones to confirm strength. 

One chart observer commented, 

“$0.16 is critical support to validate a move toward this cycle FIB extension targets of $2 > $4 > $8.” 

However, the outlook depends on whether buyers can maintain control above this level.

Future Outlook and Resistance Targets

Fibonacci extension levels suggest potential resistance points at $2.46, $4.09, and $8.49 if the price continues to rise. These targets are drawn based on prior cycle movements and are commonly used for long-term projections. However, their relevance depends on a confirmed hold above $0.16 and continued upward pressure from market participants.

The recent rejection near the $0.50 level shows that resistance zones are still active in the market. For further upward movement, XLM would need to clear lower resistance areas before approaching the longer-term targets.