The current price action for Stellar (XLM) is signaling a potential bearish pressure with key supports identified at the $0.463 and $0.4 levels.
Over the past three weeks, XLM has surged a remarkable 608%, reaching a market cap of around $14.3 billion, but has since seen a pullback.
According to COINOTAG, “XLM’s pullback in momentum could prompt traders to reconsider their positions.” The high demand for Stellar was evident last Sunday when trading volume hit $2.8 billion. This rapid increase suggests that XLM has experienced a significant price rally and traders are increasingly interested in the digital asset. In just 20 days, XLM has surged by a whopping 608%, recovering from its lows earlier this month.
However, despite this impressive rally, XLM is currently experiencing a pullback to key Fibonacci support levels, making it vulnerable. In particular, a move away from the $0.8756 high seen in January 2018 looks increasingly unlikely amid the current market correction.
The Chaikin Money Flow (CMF) indicator has reached +0.17, indicating a sustained capital flow. However, the Money Flow Index (MFI) is not yet showing a bearish divergence. Analysts are warning that there could be a potential downside move as XLM approaches critical support areas. If the current bear trend strengthens, prices could fall to $0.363 or lower.
Liquidation levels stand out as a risk factor to be considered when the market moves in these volatile conditions. According to recent liquidation analyses, the price range between $0.463-$0.473 could cause large positions to be liquidated and price adjustments to occur. Liquidation of large long positions in these areas could lead to increased selling pressure and cause XLM to experience further declines.
Investor interest is mixed as the market prepares for a further correction. The liquidity heatmap highlights liquidity zones that present opportunities and obstacles for traders. The $0.53-$0.55 zone stands out as a potential recovery area, while the critical psychological support level is estimated to be around $0.4.