In a recent tweet, Charting Guy, a well-known cryptocurrency analyst, highlighted a notable pattern forming in the Stellar Lumens (XLM) market. His tweet centered around a seven-year “Adam & Eve” pattern observed on XLM’s chart, suggesting a potentially significant breakout for the cryptocurrency.
Understanding the Adam & Eve Pattern
Charting Guy’s analysis focuses on the “Adam & Eve” pattern, a well-established chart formation in technical analysis, typically considered a bullish reversal signal. The pattern consists of two main components:
Adam Formation: This is characterized by a sharp “V-shaped” bottom, reflecting a rapid drop and rebound in price. It suggests a phase of volatility and selling pressure, culminating in a significant low point.
Eve Formation: Unlike the Adam sharp bottom, the Eve phase forms a more rounded and gradual bottom, indicating a phase of accumulation and stabilization. This rounded bottom reflects a period where selling pressure eases, and buyers gradually regain control.
The pattern is completed when the price breaks above a common resistance line known as the “neckline.” According to technical analysts, this breakout often signifies a shift from a bearish to a bullish trend, with a considerable upward price potential.
Charting Guy’s Analysis of Stellar (XLM)
In his tweet, Charting Guy highlights the formation of a large-scale Adam & Eve pattern in XLM’s price chart over the last seven years. He indicates that the resistance, which serves as the pattern’s neckline, is close to being breached, signaling a potential bullish reversal.
The chart he shared demonstrates how the Adam pattern formed between 2018 and 2020 with a sharp drop and rebound, while the Eve pattern developed in a more rounded shape from 2021 to 2024.
Based on this formation, Charting Guy suggests a bullish breakout that could push XLM’s price target to the $3 to $5 range. This projection indicates a potential 50-fold increase from the bear market lows, highlighting the scale of the potential upside.
In his analysis, he underscores the importance of patience in investing, noting that the pattern’s formation has taken seven years—a testament to the long-term nature of significant technical trends.
Community Reactions and Insights
The crypto community has responded with mixed reactions to Charting Guy’s analysis. Among the notable reactions are comments from other X users.
For instance, Ernest Enriquez expressed confidence in XLM’s potential, sharing that he has significantly increased his holdings in anticipation of a potential 10x gain. His enthusiasm echoes the broader sentiment among XLM supporters, who see the coin as an undervalued asset poised for a major breakout.
Another user, Xrpisking, drew a parallel between XLM and XRP, suggesting that XRP tends to lead market movements that XLM follows. This correlation is a point of interest among market participants, as both coins are often considered competitors in the cross-border payment space. The suggestion is that traders should position themselves in XLM before a similar surge to that of XRP.
Evaluating the Potential Breakout
From a technical perspective, the Adam & Eve pattern’s significance lies in its historical reliability as a reversal indicator. If the pattern completes, it could send Stellar (XLM) towards the $3 to $5 target range, aligning with Charting Guy’s expectations. However, it’s important to acknowledge that technical patterns are not foolproof.
One factor supporting the bullish case is the increasing adoption of Stellar’s blockchain technology, particularly in facilitating cross-border payments and decentralized finance (DeFi) projects.
Additionally, the broader crypto market’s performance, especially in the context of Bitcoin’s cycle and the anticipated rise of altcoins, could play a significant role in determining XLM’s price trajectory.
This guy here has a good point as well, and mirrors my XLM target of $40 longer term:
