The price of Stellar (XLM) has seen a significant surge in the last 24 hours, making it the second top gainer of the day after XRP. This rally could be attributed to Ripple Labs’ recent legal victory, which confirmed that XRP is not considered a security in the United States.
Jed McCaleb co-founded Stellar and Ripple, so their prices may sometimes exhibit similar trends. Over the past day, XLM has risen over 46%, with gains of around 50% on the weekly chart.
The technical outlook for the coin shows a strong bullish influence, with demand and accumulation seeing a significant increase.
However, it’s important to note that with any rally, there’s always the possibility of a price pullback. XLM must maintain a price above a certain mark to avoid the bears taking over. The increase in market capitalization of XLM is also a bullish sign, as it indicates a rise in buying volume.
XLM Price Analysis: One-Day Chart
As of writing, XLM was trading at $0.143 and has followed a similar price trajectory as XRP. The last time XLM hit this price level was in May last year; this marked a yearly high for the coin.
Overhead resistance for Stellar (XLM) is currently at $0.160, and breaking through this level would strengthen the bullish trend.
If XLM manages to break through this resistance level, it could reach $0.180, which may prove to be a challenging resistance level for the coin.
Local support for XLM is presently at $0.131, and if the price falls to this level, the bears could take over, potentially causing the price to drop to $0.111. The trading volume of Stellar (XLM) has surged by a massive 3390%, indicating strong bullish sentiment.
Technical Analysis
On the one-day chart, XLM was considered overvalued and had entered the overbought zone. The Relative Strength Index (RSI) was just below the 80-mark, indicating buying strength in the market.
XLM was also positioned above the 20-Simple Moving Average (SMA) line. This further confirmed that buyers were the driving force behind the price momentum in the market.
XLM formed buy signals in response to demand. The Moving Average Convergence Divergence (MACD) indicator showed price momentum and a potential reversal. The indicator formed two tall green histograms corresponding to buy signals growing in size.
This suggests that the price may continue to increase before retracing, suggesting that the current price level could be an entry point for traders.
The Directional Movement Index (DMI) was also positive, with the +DI line (blue) above the -DI line (orange), indicating positive momentum for the coin. The Average Directional Index (ADX) was above the 40-mark, hinting that price momentum was gaining strength on the one-day chart.
Featured image from Stellar.org, charts from TradingView.com