[XLM] could face a short-term pullback to $0.463 amid rising volumes and heightened liquidation risk
Strong demand for XLM (XLM) is reflected in its trading volume, which surged to $2.8 billion last Sunday. This rapid growth shows that traders’ interest has increased due to the sharp rise in XLM’s price. In just 20 days, the digital asset has surged a staggering 608% from its critical lows earlier this month.
Despite XLM’s impressive gains, it remains vulnerable as it is retracing towards important Fibonacci support levels. Notably, its all-time high of $0.8756 set in January 2018 seems increasingly distant amid the current market correction.
Although the Chaikin Money Flow (CMF) indicator reached +0.17, indicating continued capital inflows, the Money Flow Index (MFI) has not yet shown a bearish divergence. As XLM approaches a critical support area, a downside move may occur. If the current bearish trend strengthens, a drop to $0.363 or lower is possible.
Long liquidations could weigh on XLM price
Liquidation levels are a risk factor to watch out for as the market navigates these volatile conditions. A look at the recent liquidation chart suggests that a cluster around the $0.463 to $0.473 area could prompt a price correction. The high volume of long liquidations in this area suggests increased selling pressure that could push XLM lower as traders react to market changes.
Investor interest appears mixed as the market prepares for a possible further correction. The liquidation heat map highlights areas of liquidity that could act as both obstacles and opportunities for traders. The $0.53-0.55 range is a potential bounce zone, while key psychological support could also be found at the $0.4 level.
While XLM has experienced a sharp rise, the current market pattern suggests that consolidation or decline is likely. Investors should keep a close eye on the key support levels of $0.463 and $0.4. Developments over the next few days will be crucial as the asset’s ability to maintain momentum amid liquidation pressure will determine its next move in the evolving cryptocurrency market.