Stellar’s XLM has experienced an impressive upward movement, with its value increasing by 34% in the last seven days. The recent surge seems to have been triggered by the formation of a golden cross, a technical pattern that indicates the potential for sustained upward momentum.
Despite the positive price action, certain key indicators suggest a possible loss of momentum.
XLM Cryptocurrency: DMI Indicates Ebbing Buyer Power
The Directional Movement Index (DMI) for Stellar reveals signs of momentum shift. The positive Directional Indicator (+DI) has dropped to 25 from its previous peak of 40.3, signaling a weakening bullish presence.
Conversely, the negative Directional Indicator (-DI) has risen from 7.9 to 14.6, indicating a gradual increase in selling activity. Although the Average Directional Index (ADX) remains above 25, confirming the ongoing uptrend of XLM.
Despite this, the decline in ADX from 52.6 to 40.1 during the last two days suggests a diminishing trend strength. If the selling pressure continues to mount while buyers step back, the current bullish trajectory might face challenges, leading to a potential price consolidation or reversal.
CMF Shows Growing Outflows
The Chaikin Money Flow (CMF) for Stellar indicates a notable shift in market sentiment. The CMF has significantly decreased from its yearly high of 0.41 registered on January 1st.
This plunge into negative territory highlights a shift from strong inflows to net outflows, indicating heightened selling pressure.
Merely two days ago, the CMF was at 0.17, showcasing a rapid decline in investor trust. A sustained negative CMF could intensify downward pressure on XLM’s price, challenging its recent bullish streak.
On the contrary, a recovery into positive territory might signal a renewed interest and offer the necessary support for price stabilization or another rally.
Stellar’s Ascension: Can XLM Surpass Shiba Inu in Market Cap?
Stellar (XLM) is nearing Shiba Inu (SHIB), with a market capitalization gap of approximately $243 million to bridge. While SHIB boasts a larger circulating supply and a robust community-driven narrative, its market momentum has slowed, reflecting a modest 13.65% monthly increase compared to XLM’s 38.73% surge.
The constraints in the memecoin’s utility may impede sustained growth, giving XLM an advantage with its practical applications in cross-border transactions and blockchain advancement.
Charts illustrate XLM consolidating above $0.45 post a significant surge, with a support level at $0.44 and resistance at around $0.47. In the event of continued bullish sentiment, XLM could set its sights on $0.50 and beyond, potentially outpacing SHIB.
Nevertheless, a bearish correction might test the support level near $0.42.