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Stellar (XLM) Technical Analysis Points to Further Gains After Market Cap Crosses $13.5 Billion

Arslan Butt•Friday, January 3, 2025•2 min read

Stellar (XLM) has emerged as a standout performer in the cryptocurrency market, recording a remarkable 5% gain in the past 24 hours and reclaiming its $13.5 billion market capitalization.

Stellar (XLM) Technical Analysis Points to Further Gains After Market Cap Crosses $13.5 Billion
Stellar (XLM) price analysis

The digital asset has demonstrated exceptional momentum, outpacing its rival XRP and catching the attention of institutional investors.

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Stellar (XLM) Market Performance and Recent Developments

With XLM/USD displaying especially strength by detaching from its normal association with XRP, the price increase of the token fits a larger crypto market recovery. XRP saw an 11% increase; Stellar’s explosive climb of over 100% in a 24-hour period sets it as the best performer among the top 100 cryptocurrencies.

Former Ripple co-founder Jed McCaleb of Stellar recently underlined the basic distinctions between XLM and XRP, stressing unique consensus procedures and technical aspects separating the two platforms. Investors seem to be connecting with this difference, which could help XLM to have autonomous price action.

XLM/USD Technical Analysis

XLM/USD

 

Momentum Indicators

Currently standing at 71.1, the Relative Strength Index (RSI) stays in overbounded area since January 1. This points to great purchasing demand but also signals a moment of temporary consolidation. With the ADX rising to 19.5 and the +DI hitting 25.6, notably surpassing the -DI at 13.9, the Directional Movement Index (DMI) suggests increased optimistic momentum.

Chart Patterns and Key Support Levels

A notable falling wedge pattern has formed on the 8-hour chart, typically a bullish continuation signal. The price is currently testing the upper boundary of this pattern, with a breakout potentially triggering an accelerated upward movement.
Key price levels to watch:

  • Immediate Resistance: $0.47
  • Critical Support: $0.41
  • Secondary Support: $0.31

Analyzing Volume and Capital Flow

At 0.02 the Chaikin Money Flow (CMF) indicator has turned positive, significantly reversing its previous negative level of -0.20. This change points to rising capital inflow and stronger purchasing power, therefore supporting the present trend.

Key Considerations for Investors

The current technical setup presents a compelling risk-reward ratio, but investors should consider several factors:

  • The overbought RSI suggests potential short-term volatility
  • Volume confirmation will be crucial for validating the breakout
  • The decoupling from XRP could indicate a fundamental shift in market perception

Stellar (XLM) Price Prediction

Technical setup suggests XLM is positioned for continuous upward movement; numerous scenarios are possible:

Bullish Scenario

A successful break above the $0.47 resistance level could open the path to the psychological $0.50 mark. The falling wedge pattern suggests a potential upside target of $0.65, representing a 40% gain from current levels.

Bearish Scenario

Failure to maintain support at $0.41 could trigger a correction toward $0.31, representing a 27% decline. A daily close below $0.24 would invalidate the bullish setup and potentially lead to further downside.

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ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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