Stellar (XLM) has captured significant attention in the crypto market. Over the past 24 hours, its price surged by 20%, while weekly gains reached 124.86%, pushing the price to $0.30—the highest level since December 2021.
But the critical question remains: Is this the start of a sustained rally, or is the momentum poised to fade?
What’s Driving the XLM Rally?
The recent uptrend appears fueled by a mix of market hype and strong technical signals. However, deeper analysis reveals potential cautionary signs:
- Overbought Conditions: The Relative Strength Index (RSI) skyrocketed to 74.10 (up from <60 a day prior). An RSI above 70 typically signals an overbought asset, hinting at an impending correction.
- Historical Context: XLM has occasionally defied RSI thresholds, continuing its upward trajectory despite overbought signals.
Can Inflows Sustain the Momentum?
Stellar’s Chaikin Money Flow (CMF) sits at 0.06, a recovery from earlier negative values but far below the 0.40 peak seen in mid-November. This suggests:
- Limited New Capital: Buying pressure exists but lacks the intensity of previous bull runs.
- Challenges Ahead: Without sustained inflows, maintaining current price levels could prove difficult.
The $10 Billion Market Cap Threshold
For XLM to hit a $10B market cap, it needs an additional 15.7% rise. Achievable? Yes—but only with persistent demand. Success here would signal strong investor confidence in Stellar’s long-term potential.
Risks of a Pullback
Key concerns include:
- Support Levels: A downturn could test $0.14** (primary support). A breach might plunge prices toward **$0.0994—a 67% drop from recent highs.
- RSI & CMF Indicators: Both metrics suggest a correction is plausible.
What’s Next for XLM?
The path forward hinges on two scenarios:
- Breakthrough: Holding above $0.30 could propel further gains.
- Downturn: Slowing buying pressure may trigger a retracement.
The coming days will be decisive for Stellar’s trajectory.
FAQ
1. Why did XLM’s price surge recently?
The rally stems from market enthusiasm and technical breakout signals, though overbought conditions raise caution.
2. Is XLM overvalued now?
With an RSI above 70, XLM is overbought—a classic correction warning. However, past trends show it can remain elevated briefly.
3. What’s the key resistance level for XLM?
$0.30 is the immediate barrier. A sustained breakout here could open doors to higher valuations.