Stellar [XLM] ranks high on the weekly decline list on CoinMarketCap, having dropped 8% after rising 173% last week.
Although this pullback may be a healthy retreat before another round of increases, do the indicators support a similar outlook?
What's next for XLM?
From a weekly chart perspective, XLM has held the key resistance level of $0.4 as support. This increases the likelihood of this altcoin targeting the 2021 high of $0.79 or higher.
The rise in CMF (Chaikin Money Flow) indicates that capital inflows have reached a historic high, so after building sufficient momentum above $0.4, the upward trend may continue.
However, the 12-hour chart indicators suggest that the continuation of the upward trend may take some time. CMF has remained flat since November 20, indicating a stagnation of capital inflow, which could suppress any sustained upward outlook.
Trading volume has also significantly decreased, which may prompt XLM to retest support and liquidity below $0.4.
Meanwhile, the price of XLM may fluctuate between $0.40 and $0.62 before attempting to break through, whether upwards or downwards.
Whales exit long positions
Whales' market positioning on XLM supported the price range outlook. After profit-taking last week, whales exited long positions, as indicated by the delta turning negative between whales and retail investors.
In most cases, the risk aversion of large participants tends to trigger price consolidation or pullbacks.
Moreover, the ADX (Average Directional Index), which measures the strength of token price trends, has dropped from nearly 80 to 21.
Any decline below 20 will reinforce the weak trend and pose a risk of opening any trading positions, especially for swing traders.
In short, the upward trend of XLM is expected to continue, but the retreat of whales may delay this outlook in the short term.
