A well-known cryptocurrency expert has reported that Stellar's native token, XLM, shows potential to reverse its recent downward trend due to emerging bullish price movements. The analyst highlighted that a key technical indicator is signaling a buy opportunity, suggesting a possible upward shift in momentum.
Key Support Level and Potential Price Movement
According to the expert, XLM must maintain a critical support level of $0.33 to sustain its upward potential. If this level holds, the token could experience a significant price increase. Technical analysis indicates that XLM has been consolidating within a narrow range between $0.34 and $0.39 over the past four trading sessions, hovering near the crucial support zone at approximately $0.347.
This period of consolidation is likely to determine the token’s next major price direction. Based on recent price behavior and historical momentum, if XLM successfully defends this support level, it could rally by up to 25%, reaching around $0.45.
Conversely, a daily close below $0.33 could trigger a downward movement, potentially resulting in a 33% decline toward the $0.22 level.
Technical Indicators and Market Sentiment
The daily chart for XLM suggests that the price is currently overstretched and trading significantly above the 200 Exponential Moving Average (EMA). While this indicates that the asset remains in a broader uptrend, it also highlights the possibility of a short-term correction.
The TD Sequential, a popular technical indicator, recently flashed a buy signal for XLM, further supporting the possibility of a trend reversal.
On-Chain and Market Data Insights
Data from on-chain analytics firm Coinglass reveals growing interest among long-term holders and traders as XLM approaches its key support level. Exchange flow metrics indicate substantial outflows, with approximately $6.5 million worth of XLM moving out of exchanges—a sign of accumulating behavior and increased buying pressure.
This decline in exchange reserves often suggests that investors are moving tokens into long-term storage, reducing immediate selling pressure and potentially setting the stage for a price increase.
Market sentiment among traders also appears bullish. The XLMUSDT pair on Binance currently shows a long/short ratio of 1.87. A ratio above 1 generally indicates that more traders are betting on price appreciation than a decline. Further data reveals that 65.4% of top traders on the platform hold long positions, while 34.6% maintain short exposures.
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Frequently Asked Questions
What is the key support level for XLM?
The crucial support level for XLM is $0.33. Holding above this level is essential for maintaining bullish momentum. A break below could lead to further declines.
What is the TD Sequential indicator signaling for XLM?
The TD Sequential recently generated a buy signal, suggesting a potential bullish reversal for XLM based on its current price patterns.
How are traders positioned in the XLM market?
Data from Binance indicates a predominantly bullish stance among traders, with a long/short ratio of 1.87 and over 65% of top traders holding long positions.
What do exchange outflows indicate for XLM?
Significant exchange outflows often suggest accumulation and reduced selling pressure, which can be a positive signal for future price appreciation.
What is the price target if XLM holds support?
If XLM maintains the $0.33 support, it could rally by up to 25%, targeting the $0.45 price level.
What risk is involved if support is broken?
A daily close below $0.33 may result in a downward move toward $0.22, representing a decline of approximately 33%.
Disclaimer: This content is for informational purposes only and is not intended as investment advice. Cryptocurrency trading involves substantial risk, including the possible loss of principal. Always conduct your own research and consider seeking advice from a qualified financial advisor before making trading decisions.