Can Stellar [XLM] Maintain its Bullish Momentum?

Stellar [XLM] recently surged from its strong support around the $0.08 region, allowing the bulls to recapture important moving averages on the daily chart.

This upward movement propelled XLM up by approximately 12% in the past few days. Currently, XLM is trading at $0.0982.

With the 20-day and 50-day EMAs converging and pointing upwards, there is a great opportunity for the bulls to regain momentum.

Will Bulls Break Through the $0.1 Resistance Level?

XLM is currently trading above both the 20-day ($0.0956) and 50-day EMAs.

If the 20-day EMA manages to close comfortably above the 50-day EMA and the moving averages continue to trend upwards, XLM could target its 200-day EMA at $0.1027.

A successful breakout above this level could lead to a test of the immediate resistance at $0.103, followed by the zone around $0.1126.

It is notable that XLM broke above its long-term trendline resistance (dashed blue line) during the recent rally and turned it into a support level.

The RSI climbed steadily to 59.15, indicating a growing bullish sentiment. However, the recent lower highs in price action suggest a potential bearish divergence.

Hence, a bearish correction may be seen in the short term before any bullish resurgence.

If the broader crypto market turns bearish or XLM fails to surpass the 200-day EMA, the altcoin could retest the $0.08 support level.

In such a scenario, the price action might form a descending triangle pattern. Losing the $0.08 support could lead to a deeper retracement towards $0.075.

Insights from Derivatives Data

In the last 24 hours, XLM’s trading volume spiked by more than 36% to $45.44 million, indicating significant trading activity. The open interest for XLM also saw a 3.17% increase.

Binance’s long/short ratio sits at 2.0075, signaling a preference for long positions among traders. Similarly, OKX shows a long/short ratio of 1.6, reflecting a bullish sentiment. This trend is consistent across major exchanges.

Traders should pay close attention to the crucial $0.08 support and the $0.103 resistance levels. A decisive break above the latter could pave the way for further upside potential.

Nonetheless, a failure to sustain current levels could confirm a bearish pattern on the daily chart.

Additionally, monitoring Bitcoin’s price movements and overall market sentiment is essential before making any investment decisions.

Disclaimer: The information provided is not financial advice and solely represents the author’s views