Can Stellar (XLM), which has been rising rapidly in recent days, resist the selling pressure?
Stellar (XLM) is facing a deepening downtrend, having retreated 29% from its 2021 peak. While the increasing selling pressure since Dec. 20 has worried investors, some on-chain data is showing signs of a reversal.
The Directional Movement Index (DMI) indicator is used to measure the strength of a trend. When we look at XLM, this indicator is currently positive. The Chaikin Money Flow (CMF) indicator reflects institutional buying in the pair. The increase in CMF to 0.19 indicates that institutional buying for XLM is increasing. Stellar’s Directional Movement Index (DMI) is notable for its increasing trend strength. The average Directional Index (ADX) rose from below 20 to 26.8 in just four days. The ADX indicator measures the strength of a trend, with below 20 indicating a weak trend, between 20-25 indicating a developing trend, and above 25 indicating a strong trend.
The $0.31 support level is critical for XLM. If this support level is broken, the price could fall to $0.25. On the other hand, Chaikin Money Flow (CMF) data is signaling a potential trend reversal and upward momentum. If Stellar can capitalize on this positive money flow and start an uptrend, the price could first test the $0.40 resistance. If the $0.40 level is maintained, the price could rise to $0.47, a 34 percent increase from its current level.