Stellar (XLM) has experienced an extraordinary surge, with its price skyrocketing over 400% in the past month, peaking at $0.63—its highest level since 2021. While the bullish trend remains intact, recent indicators suggest a potential slowdown, possibly postponing the anticipated climb to $0.70.
Analyzing Stellar's Current Momentum
Declining Trend Strength
The Average Directional Index (ADX) for XLM has dropped to 23.6 from over 40 just days ago, signaling weakening momentum.
ADX Interpretation:
- Above 25: Strong trend.
- Below 20: Weak or consolidating trend.
Despite the dip, the positive directional indicator (D+ = 24.7) still outweighs the negative (D- = 14.9), indicating persistent buying pressure. For a renewed push toward $0.70, the ADX must rebound above 25.
Selling Pressure Evident in CMF
XLM's Chaikin Money Flow (CMF) has stayed negative (-0.16) for three consecutive days, reflecting increased selling activity.
CMF Insights:
- Positive CMF: Buying dominance.
- Negative CMF: Selling pressure.
A sustained negative CMF could delay the uptrend, while a reversal would reignite bullish momentum.
XLM Price Forecast: Key Scenarios
Bullish Case: Targeting $0.70
- Catalyst: Regained momentum with ADX > 25 and positive CMF.
- Upside Potential: 37% rally from current levels.
Bearish Scenario: Risk of Pullback
- Support Level: $0.41 (critical for medium-term bullish outlook).
- Downside Risk: Breakdown below $0.41 may trigger deeper correction.
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FAQs
Q: Is Stellar (XLM) still a good investment after its 400% surge?
A: While XLM shows strong momentum, monitor ADX and CMF for trend sustainability. Diversify investments to mitigate volatility risks.
Q: What’s the key resistance level for XLM?
A: $0.70 is the next major target, but the token must overcome weakening momentum signals first.
Q: How does CMF impact XLM’s price?
A: A negative CMF suggests selling pressure, potentially slowing gains until buying activity rebounds.
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Conclusion
Stellar’s remarkable rally faces a crossroads. While $0.70 remains achievable, traders should watch for:
- ADX recovery above 25.
- CMF returning to positive territory.
- Holding the $0.41 support level.
Always conduct independent research and consult financial advisors before investing.
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