Stellar (XLM), a major competitor to Ripple, has reached a critical juncture in its price trajectory, leaving investors on edge. After a staggering 38% decline in recent weeks, the token is showing signs of recovery, sparking optimism in the market. However, its future direction remains uncertain as XLM tests a crucial resistance level.
Stellar (XLM) Technical Analysis and Price Outlook
XLM has been struggling against a descending trendline, consistently facing resistance throughout its decline. However, the recent surge in price over the past two days has placed the token in a make-or-break position.
According to expert technical analysis, the $0.35 resistance level is key to determining XLM’s next move. If the token successfully closes a daily or four-hour candle above this mark, a potential 22% rally could push its price to $0.43. Conversely, failure to breach this resistance could lead to a 10% decline, bringing the asset down to $0.30.
Despite the uncertainty, XLM is currently trading above its 200 Exponential Moving Average (EMA) on the daily chart, suggesting the potential for a continued uptrend.
Market Sentiment and Trading Volume
At the time of writing, XLM is trading around $0.346, reflecting a 3.5% increase in the past 24 hours. However, this positive price movement has not been accompanied by increased trading activity. In fact, trading volume has dropped by 4%, indicating reduced participation from traders and investors.
$4 Million Worth of XLM Outflow Raises Concerns
On-chain data from analytics firm Coinglass reveals that investors have been offloading XLM tokens. Exchange outflows show that $4 million worth of XLM has exited platforms in the past 48 hours. Despite this, open interest in XLM has surged by 9%, indicating an uptick in trader engagement and the formation of new positions.
With XLM hovering at a pivotal resistance level, the coming days will be crucial in determining whether the token experiences a significant breakout or faces another downturn.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
Also Read: David Schwartz Comments on Jed McCaleb’s Exit from Ripple and the Creation of Stellar
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