Title: Can Stellar [XLM] Maintain its Current Bullish Momentum?

Having recently bounced back from its longstanding support around the $0.08 region, Stellar (XLM) has witnessed a resurgence, allowing the bulls to recapture significant moving averages on the daily chart.

This upward momentum has driven XLM to surge by approximately 12% in the past few days, with the current trading price standing at $0.0982.

With the convergence and upward trajectory of the 20-day and 50-day exponential moving averages (EMAs), there exists a favorable opportunity for the bulls to maintain their positive momentum.

Is There Potential for Bulls to Break the $0.1 Resistance?

Currently, XLM is trading above both the 20-day and 50-day EMAs, positioned at $0.0956.

If the 20-day EMA succeeds in closing above the 50-day EMA comfortably, and as the moving averages continue to trend upward, XLM could potentially challenge its 200-day EMA level at $0.1027.

In the event of a breakout above this threshold, the immediate targets would shift to the $0.103 resistance, followed by the zone around $0.1126.

Notably, XLM has managed to surpass its long-term trendline resistance (indicated by the dashed blue line) and has transformed it into a support level during the recent rally.

The Relative Strength Index (RSI) has also shown a steady rise to 59.15, indicating a growing bullish sentiment. However, the formation of recent lower highs in the price action suggests a minor bearish divergence.

Consequently, a potential bearish correction may materialize in the short term before a potential recovery.

In a bearish scenario where the broader crypto market sentiment turns negative, or if XLM fails to breach the 200-day EMA level, the altcoin could revisit the $0.08 support level.

In such a case, the price action may exhibit a descending triangle-like structure, and a failure to hold the $0.08 level might lead to a deeper retracement towards $0.075.

Insights from Derivatives Data

In the last 24 hours, XLM’s trading volume spiked by over 36% to reach $45.44 million, signifying heightened trading activity. The open interest for XLM also experienced a 3.17% increase.

On Binance, the long/short ratio stands at 2.0075, indicating a preference for long positions by traders. Similarly, OKX’s long/short ratio of 1.6 echoes a similar inclination towards buying, reflecting a bullish sentiment prevailing across major exchanges.

Investors should closely monitor the critical levels at the $0.08 support and the $0.103 resistance. A decisive breakout above the latter could pave the way for testing higher price levels.

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

Furthermore, it is imperative to consider Bitcoin’s price movements and the overall macroeconomic outlook before making any trading decisions.

Disclaimer: The views expressed in this article are the writer’s own opinion and should not be taken as financial advice for investments or trading decisions.