XLM poised to reverse its downside momentum due to the formation of bullish price action, says expert

XLM, the native token of Stellar, is poised to reverse its downside momentum due to the formation of bullish price action, as reported by a prominent

Crypto expert highlights bullish signal for Stellar (XLM)

A prominent crypto expert has recently shared an analysis of Stellar (XLM), highlighting a bullish technical indicator and key price levels to watch for the altcoin.

On 23rd December, the expert posted an update on X (formerly known as Twitter), showcasing a technical indicator called TD Sequential, which is now displaying a buy signal for XLM.

Moreover, the expert added that the altcoin’s price could rally further only if it manages to hold the $0.33 level; otherwise, it might drop.

XLM technical analysis and key levels

A glance at AMBCrypto’s technical analysis for XLM reveals that the altcoin has been consolidating within a tight range between $0.34 and $0.39, close to a crucial support level of $0.347 over the last four trading days.

This consolidation period is setting the stage for the next directional move for XLM’s price. Considering the recent price action and historical momentum, if the altcoin manages to hold this support, there is a possibility of a strong rally towards the $0.45 level, marking an increase of nearly 25%.

On the other hand, if XLM fails to hold this level and closes a daily candle below the $0.33 mark, the price might head towards the lower price extreme at $0.22 in the future, indicating a potential decrease of 33%.

A further observation of the XLM daily chart reveals that the price is significantly extended and遠離 the 200 Exponential Moving Average (EMA), although it suggests that the asset is still trending upwards.

Bullish on-chain metrics

Adding to this bullish outlook, as the token approaches a crucial support level, interest from long-term holders and traders is also being highlighted by on-chain analytics firm Coinglass.

Data from XLM spot inflow/outflow metrics showed a significant outflow of $6.5 million worth of XLM from exchanges, suggesting increased buying pressure, potential upside momentum, and a favorable buying zone.

Apart from the participation of long-term holders, traders have also exhibited strong bullish market sentiment.

At the time of writing, the long/short ratio for Binance’s XLMUSDT pair stood at 1.87, indicating bullishness with a ratio above 1. Data also showed that 65.4% of top traders on Binance are currently holding long positions, while 34.6% are holding short positions.

Combining all these on-chain metrics with the technical analysis, it appears that the bulls are currently leading the asset and might maintain their strength to hold the $0.35 level in the future.

At press time, XLM was trading at around $0.358 and had seen a price decrease of 3% over the last 24 hours. During the same period, its trading volume dropped by 19%, indicating reduced participation from traders and investors amid market uncertainty.