Stellar (XLM) has experienced a remarkable surge in value, driven by positive sentiment surrounding Bitcoin (BTC) which has led to significant gains, propelling Stellar to reach its highest levels in years.
As of the latest update, XLM was trading at $0.3027, marking a notable 26% increase in the past day. The Relative Strength Index (RSI) currently stands above 86, indicating that the market is highly overbought, potentially signalling a forthcoming correction.
Despite the possibility of a pullback, the prevailing bullish trend in the market could have a substantial impact on XLM’s trajectory.
Can XLM Sustain Gains Following a 220% Increase?
Even though the altcoin season has not yet fully materialized, especially considering Ethereum’s (ETH) lackluster performance, XLM has stood out by recording an impressive surge of over 220% in just 17 days.
This surge came after XLM found crucial support at the $0.08 level, enabling the bulls to push the price above the critical 200-day Exponential Moving Average (EMA), which currently sits at $0.1109.
Following this momentum, XLM reached a 35-month peak on November 22nd, testing resistance at the $0.3 level. The current price movement places XLM in proximity to this resistance level.
A successful breach above this point could pave the way for a push towards the $0.4 resistance in the forthcoming weeks.
However, a failure to surpass this level in the near term may result in a retracement towards the $0.24 support level, which coincides with the previously breached trendline resistance.
The current uptrend, supported by Bitcoin’s record-breaking surge to new all-time highs, indicates a positive outlook for further upward momentum. Nevertheless, the overbought RSI suggests a potential consolidation or retracement in the near future.
Crucial Price Levels to Monitor
Resistance: The $0.3 mark is a significant resistance level for XLM bulls. A breakout above this barrier could propel XLM towards the next resistance at $0.4.
Support: Immediate support is situated around $0.24. If the price dips below this level, the next support zone is likely to be around $0.17.
Analysis of XLM Derivatives Data
The trading volume has surged by 92.97% to reach $2.32 billion, indicating a substantial increase in interest in the ongoing rally.
Open Interest has also risen by 56.83% to $174.74 million, implying that traders are actively taking positions and anticipating significant market movements.
The 24-hour long/short ratio for XLM is currently at 0.9743, suggesting a relatively balanced market sentiment.
However, the Long/Short Ratios among Binance accounts and top traders are slightly more optimistic at 1.0186 and 1.0346, indicating a slight advantage for bulls.
Investors should keep a close eye on Bitcoin’s price action and overall market sentiment when considering opening long or short positions.
Disclaimer: The opinions expressed in this article are personal and should not be considered as financial, investment, or trading advice.