Currently, the native token of Stellar, known as XLM, is displaying promising signs on the price charts, indicating a likelihood of significant upward momentum. The digital asset has recently formed a bullish pattern in its daily trading timeframe. By January 12th, the broader cryptocurrency market exhibited signs of recovery, with various assets like XRP, Dogecoin (DOGE), and Cardano (ADA) witnessing notable rallies.
But did XLM follow the same trend?
Reasons Behind XLM’s Rally
The recent market dynamics have been instrumental in driving XLM towards a positive trajectory after facing challenges in December 2024.
Currently, the factors contributing to XLM’s bullish outlook include positive price action, potential breakout scenarios, accumulation by long-term investors, optimistic trader sentiment, and an overall improvement in market sentiment.
Technical Analysis and Critical Levels for XLM
Analysis from CryptoCrypto suggests that XLM appears bullish on the charts, with the coin on the brink of breaking out from a bullish head and shoulders pattern in the daily timeframe.
Predicting XLM’s Price Movement
Examining the daily chart, the key resistance level for XLM has been identified at $0.456, a level that has posed a strong resistance challenge for the asset since the start of December 2024.
If XLM successfully breaches this resistance level and closes a daily candle above $0.47, there is a high likelihood of a 30% surge, potentially reaching the $0.60 mark in the future. Additionally, positive market sentiment and upcoming events are further backing this optimistic forecast.
Confidence from Long-Term Investors and Traders
Given the optimistic outlook, Coinglass, an on-chain analytics firm, reported a notable interest and confidence among investors and long-term holders in XLM. Data shows a significant influx of $3.05 million worth of XLM tokens by long-term holders from exchanges in the past 24 hours, indicating a prime buying opportunity and the potential for increased buying pressure.
Aside from long-term holders, traders are also actively engaging with XLM, establishing new positions consistently. Reports show a 27% increase in XLM’s Open Interest over the same period. Currently, the long/short ratio stands at 1.13, indicating strong bullish sentiment among traders.
As of now, 53.21% of leading traders have taken long positions, while 46.79% have opted for short positions.