Stellar Lumens (XLM) has recently experienced significant momentum loss due to profit booking by large investors, which is leading to some uncertainty about the future of its price.
After a remarkable 173% surge recently, XLM is struggling to hold onto a critical support level above the $0.40 level. However, the recent 8% drop raises concerns about how long this support can be maintained.
According to CoinMarketCap data, recent price movements raise doubts about whether the consolidation process will continue, with large investors remaining passive.
Let’s examine the recent market action on Stellar Lumens (XLM) as major investors book profits and how the altcoin is performing at a critical support level. What could be the future of XLM?
Recent trading data suggests that XLM is holding a critical support level at $0.40, setting the stage for a possible rally towards the 2021 high of $0.79.
Technical indicators are cautiously optimistic about XLM’s price action. The Chaikin Money Flow (CMF) metric suggests that money flows are stable and there could be momentum above the $0.40 level. However, a pause in these flows could dampen buying and selling appetite in the short term.
The flattening of the CMF and the decline in trading volume since November 20 raise the possibility of a retest of the $0.40 support and raise concerns about market liquidity.
The current market environment suggests that XLM is struggling to determine direction and the price could fluctuate between $0.40 and $0.62, meaning that the price is about to choose between a breakout to the upside or a reversal.
The exit of large investors from the market caused price consolidation. Crypto whales closed their long positions by taking profits, which led to a significant pullback. The negative Whale vs. Retail Delta phenomenon could mean that the price will consolidate or enter a correction.
The decrease in the Average Directional Index (ADX) value from 80 to 21 supports this situation and indicates that the trend strength is weakening. Values below 20 may indicate a weak trend, which may force swing traders to be cautious.
As a result, XLM staying above the $0.40 level is critical for price action. While an optimistic recovery is possible, market indicators and the actions of major investors may delay the upward momentum. Investors and traders should continue to monitor market conditions by carefully monitoring XLM’s movements during this critical period to assess future opportunities.