Stellar (XLM) has seen a strong 50% price increase over the past 24 hours, becoming the best-performing asset during this period. The surge is tied to Grayscale Investments LLC’s recent 10-K filing for the Grayscale Stellar Lumens Trust.

At the moment, the altcoin is trading at $0.45, its highest price since 2021. However, the daily chart shows a possible short-term decline. Here are the details.

Grayscale Stellar Lumens Trust Sees Surge in Net Assets

On Friday, Grayscale Investments LLC filed a 10-K for Grayscale Stellar Lumens Trust (XLM) for the fiscal year ending September 30, 2024. The report noted a 10% increase in total net assets over the fiscal year under review.

The 10-K filing is an annual report that publicly traded companies in the United States must file with the Securities and Exchange Commission (SEC). This report provides an overview of the company's financial performance. It includes audited financial statements, business operations, risk factors, and management's discussion and analysis.

Grayscale Stellar Lumens Trust (XLM), an investment vehicle that offers the opportunity to invest in XLM, has reportedly incurred losses. This was due to the decline in the value of the token during the review period and fees paid to fund sponsors. However, these losses were offset by an increase in 34,875,230 XLM tokens valued at $3,923 added to the fund. This resulted in a net increase in the fund’s total assets.

XLM Reacts to the News

The positive sentiment surrounding this filing has led to a surge in the value of XLM. In the past 24 hours, the token’s price has surged 58%, becoming the market’s highest gainer. As of press time, the altcoin is trading at $0.45, a price last recorded in November 2021.

However, readings from the daily chart suggest that this rally may not continue as XLM has become overbought among market participants. For instance, the Relative Strength Index (RSI) has hit an all-time high of 92.54 at press time.

RSI measures overbought conditions of an asset in the market. It ranges from 0 to 100, with values ​​above 70 indicating that the asset is overbought and in need of a correction. Conversely, values ​​below 30 indicate that the asset is oversold and could see a recovery. XLM’s RSI reading of 92.54 suggests that it is severely overbought and at risk of a correction.

Furthermore, the price of XLM is trading above the upper line of the Bollinger Bands indicator, confirming the probability of a price correction.

The Bollinger Bands indicator measures market volatility and identifies potential buy and sell signals. It consists of three main components: the middle band, the upper band, and the lower band.

When the price is trading above the upper band, it indicates that the asset is overbought. This means that the asset price has risen significantly above its average price and is at risk of a correction in the short term.

XLM Price Prediction: Token May Give Up Recent Gains

Once buyer exhaustion occurs, the price of XLM is at risk of retracing recent gains. According to the Fibonacci Retracement tool, if this happens, its target price would be the support level formed at $0.35. If the bulls fail to defend this level, the token price could fall further to $0.23.

Conversely, if buying pressure increases, the XLM Token price will continue its uptrend and attempt to surpass $0.52, a peak it last reached in May 2021.

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