After hitting that $0.297 mark, Stellar Lumen’s (XLM) near-term rally bumped into an obstacle that immediately manifested itself in a double-digit percentage correction. As of press time, Stellar’s (XLM) price is dwelling in the daily lows, just above $0.23, according to SoSoValue.
Now, seasoned traders are fearing that Stellar Lumens (XLM) might be facing a harsh market correction all the way back to $0.20. In the latest technical analysis, trader Ali Martinez has noted the shift: based on the trend-following TD Sequential, Ali identified a ‘sell’ signal on the daily charts.
Two Sides Of XLM: Why This Indicator Concerns Traders
Conversely, the same 9-candle TD Sequential indicator flashed a ‘buy’ signal before Stellar Lumens (XLM) took off for the 107% upswing. Just like the ‘buy’ signal occurred on XLM’s price at $0.14 a few weeks ago, the same technical indicator now strengthens the bearish conviction.
Right now, the OG altcoin is moving towards “a period of natural consolidation”, where “strategic spot profit-taking is entirely healthy after such an aggressive vertical extension”. While the 14% XLM price drop comes as a natural phase, the $0.20 key support could soak up the selling pressure.
Certainly, the selling pressure goes beyond technicals. After the Depository Trust & Clearing Corporation’s (DTCC) decision to launch tokenization services on Stellar (XLM), the altcoin market sentiment visibly decoupled from Bitcoin (BTC), which sank below $70,000 while XLM came out as the top gainer.
$900M Volume Hints At Mass Selling, But Is It Really So?
With the DTCC-flavored rally now in the profit-taking phase, the trading volume is still relatively high – reaching beyond $900 million on Tuesday, according to CoinGecko. DailyCoin’s research team dug into the real-time on-chain metrics to find out if crypto currency whales are also sharing the same sentiment with retail.
The one-hour candlestick XLM price charts showcase conflicting results. The DLT altcoin’s SuperTrend & Bull Bear Power (BBP) index are still on the bullish side. To add, the whale movement-tracking Chaikin Money Flow (CMF), at 0.28, is clearly hinting at big investors still perceiving the current XLM price as an attractive entry point for acquisition.
Ultimately, this puts the market in a ‘wait & see’ mode. Whilst Stellar Lumen’s (XLM) price action may look unpleasant today, the technical setup still remains intact. Crypto traders shall monitor the Red-Label Bollinger Band (BOLL) at $0.30 for an upwards breakout, while the $0.16 – $0.18 major demand territory is likely to shield XLM from wiping out the whole rally.
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People Also Ask:
XLM just had an impressive 107% rally, but the momentum is now running into some warning signs that suggest the fast move might be getting overheated.
Technical indicators are flashing that XLM is overbought. This usually happens after very sharp rallies and often leads to a cooldown or short-term pullback.
Not necessarily. Many coins take a breather after big gains like this. It could just be healthy profit-taking before the next leg up — or the start of a deeper correction.
Only with caution. The rally was strong, but buying right at overbought levels can be risky. Many traders prefer to wait for a pullback and better confirmation before jumping in.
Keep an eye on key support levels, trading volume & read DailyCoin for crucial updates on Stellar. If XLM holds its recent gains without crashing, the uptrend may still be intact.
DailyCoin’s Vibe Check: Which way are you leaning towards after reading this article?
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