- XLM has surged 372% this month, drawing massive attention across the market.
- A sharp 16% drop in the last 24 hours has weakened momentum.
- Key support and resistance levels could define XLM’s next big move.
Stellar Lumens (XLM) has captured the crypto world’s attention with a staggering 372% rise this month. Fueling this rally were major endorsements from global entities like MasterCard and Franklin Templeton. Yet, the dramatic spike in value has met resistance, with XLM dropping by 24% since the high of $0.6342.
The abrupt correction has sparked speculation among traders: is XLM’s rally over, or is this a healthy retracement before its next leg up? The answer lies in key indicators like Open Interest (OI), social dominance, and technical charts.
XLM’s Early Warning Signs
XLM’s Open Interest hit an all-time high of $339 million on November 24, reflecting heightened speculation during its bullish run. However, that figure has since plunged to $209 million, with $130 million in closed contracts signaling waning enthusiasm among derivatives traders.
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Social dominance—a measure of how often XLM is discussed relative to other cryptocurrencies—has similarly tumbled from 3.13% to 1.73%. This drop indicates that market participants are shifting their focus away from XLM, potentially exacerbating the bearish sentiment.
From a technical perspective, XLM’s Money Flow Index (MFI) has exited the overbought zone, pointing to reduced buying pressure. With both on-chain and social metrics signaling a cooldown, XLM could face significant hurdles in maintaining its upward momentum.
XLM’s Key Levels
XLM’s current trading level at $0.4806 places it above critical support at $0.40. A breakdown below this level could trigger a steeper decline to $0.28 or even $0.22. Conversely, a rebound could see XLM retest its resistance at $0.50 and potentially aim for $0.60.
The daily Relative Strength Index (RSI) is still quite high, hovering around 76.48, placing XLM above the neutral zone. This suggests that the asset is overbought at the moment, leaving room for further downside if selling pressure persists.
The Ichimoku Cloud indicator, which shows XLM struggling to hold above key levels, adds to the bearish sentiment. The thinning cloud suggests weakening support and a deeper plunge below the cloud could confirm a bearish reversal.
On the Flipside
- XLM remains up 92% over the past week, offering holders strong profits despite the recent correction.
- Endorsements from high-profile institutions could bolster long-term confidence in Stellar.
- If buying pressure returns, XLM could reclaim $0.60 and potentially test $0.70.
Why This Matters
While short-term traders may face challenges due to declining Open Interest and social sentiment, long-term investors might see this as a chance to re-enter at lower levels. With XLM maintaining relevance through institutional partnerships and a growing use case, its trajectory will remain a key focus for the crypto community.
Discover how Stellar’s XLM is making waves, climbing over 187% and setting sights on the $1 milestone. Learn more here:
Stellar’s XLM Climbs Over 187%; Analysts Eye $1 Milestone
Explore why Ripple’s XRP and Stellar’s XLM often mirror each other’s moves and what it means for their future. Read here:
Ripple’s XRP and Stellar’s XLM Link: Why Do They Move in Sync?
