Stellar Price Surge: Is a Correction Coming for XLM?

Stellar Price Surge: Is a Correction Coming for XLM?

The post Stellar Price Surge: Is a Correction Coming for XLM? appeared first on Coinpedia Fintech News

Stellar (XLM) has been on fire lately. In just 24 hours, its price jumped 20%, and over the past week, it’s up an eye-popping 124.86%, hitting $0.30. That’s the highest it’s been since December 2021. But here’s the big question: Is this the start of something bigger, or is the rally about to lose steam?

What’s Driving the Rally?

The main reason behind XLM’s recent jump seems to be a mix of market hype and strong technical signals. But if you dig a little deeper, there are some warning signs. The Relative Strength Index (RSI) has shot up to 74.10. Just a day ago, it was below 60. When the RSI goes above 70, it’s a red flag. It usually means the asset is overbought and could correct soon. Still, sometimes XLM pushes higher even after reaching these levels. So, while a dip could come, it’s not a certainty.

Are Inflows Strong Enough to Sustain This?

Now, let’s talk about money. Stellar’s Chaikin Money Flow (CMF) is at 0.06, a nice recovery from the negative numbers we saw earlier. But it’s still way lower than mid-November when CMF hit 0.40. That tells us something important: there’s not a huge amount of new money flooding in. The buying is there, but it’s not as strong as during the last big bull run. This could make it harder for XLM to keep up the momentum.

Can XLM Hit $10 Billion?

If XLM wants to reach a $10 billion market cap, it needs to rise another 15.7%. It’s doable, but to get there, the buying pressure will need to stay strong. If it happens, it would be a big sign that investors still believe in Stellar’s potential.

The Risk of a Pullback

But there’s a catch. If the price starts to fall, XLM could test support at $0.14. If that level doesn’t hold, it could drop all the way down to $0.0994. That would be a sharp 67% drop from its recent peak. The RSI and weak CMF suggest that a pullback is possible.

What’s Next for XLM?

So, what’s in store for Stellar? The price action has been impressive, but there are definitely risks. If XLM can break past $0.30 and hold, we might see it rise even further. But if the buying slows down, the price could drop. One thing is for sure: the next few days will tell us a lot about where XLM is headed.