XLM Price Prediction: Stellar Aims for 30% Jump Amid Decreasing Wedge Pattern – Crucial Levels to Monitor
Stellar (XLM) is displaying potential for a breakout after establishing a descending wedge pattern, a formation that could result in a 30% price surge to $0.445.
Traders are vigilantly observing critical resistance at $0.3400 for indications of upward momentum or a potential decline to $0.2600 in case bearish pressure persists.
At the time of writing, XLM was trading at $0.3172, with a daily trading volume of $316.87 million. Over the previous week, the altcoin experienced a 4.94% drop, causing its market capitalization to decrease to $9.70 billion, with a circulating supply of 31 billion tokens.
Essential support and resistance thresholds
Currently, XLM/USD is within a descending channel, with the upper limit at $0.3400 serving as a resistance level.
A breakout above this point would likely confirm bullish momentum, setting the stage for a climb towards $0.4450, representing an approximate 30.95% increase.
On the downside, immediate support was identified at $0.3047, where price consolidation was evident.
If XLM breaches this level, traders could witness further bearish movement, testing the subsequent major support level at $0.2602.
This level would indicate a more pronounced downtrend and a notable shift in market sentiment.
Emergence of bearish indicators
Technical signals at the time of writing indicated bearish pressure on XLM. The occurrence of a Death Cross, where the 50-day Simple Moving Average (SMA) drops below the 200-day SMA, pointed to a lack of buying interest.
XLM has faced challenges in surpassing its moving averages, allowing sellers to dominate the market.
The Directional Movement Index (DMI) revealed the -DI (representing sellers) at 30.91, exceeding the +DI (indicating buyers) at 17.85, confirming bearish strength.
Simultaneously, the ADX (31.00) highlighted a robust downtrend. To reverse this trend, buyers must bolster their position, causing the +DI to cross over the -DI, signaling diminishing selling pressure.
Market sentiment and liquidation trends
At the time of writing, the Chaikin Money Flow (CMF) stood at 0.21, reflecting moderate capital inflow into XLM. Nonetheless, this trend may not be robust enough to generate significant upward momentum.
In contrast, pessimistic sentiment dominated the derivatives market.
Per data from Coinglass, short liquidations amounted to $30.05K, surpassing long liquidations totaling $18.79K. Binance witnessed the highest short liquidations at $28.74K, while long positions experienced closures worth $15.14K.
These liquidation patterns hinted at traders adjusting their positions in anticipation of increased market volatility.
Funding Rates and Open Interest
As per Coinalyze data, the aggregated Funding Rate was -0.0130, suggesting that traders were incurring costs to maintain their short positions.
The anticipated Funding Rate of -0.0164 indicated a probable continuation of bearish sentiment in the coming days, unless buyers intervene to drive momentum.
Open Interest surged by 1.84% to $145.76 million, while trading volume spiked by 67.48% to $238.15 million.
This uptick in activity signifies increased market participation as traders brace themselves for XLM’s next trajectory, whether it breaches the $0.3400 resistance level or descends towards $0.2600.