Stellar (XLM) Shows Bullish Momentum, Analyst Predicts Potential Surge
Stellar (XLM) is showing signs of bullish momentum, currently up slightly by 0.50% on Friday. This follows a significant 9.71% gain the previous day. Veteran analyst Peter Brandt sees a potentially very bullish chart forming for XLM, as buyers aim to break through the $0.50 psychological level. Open interest in XLM has also surged to an all-time high.
XLM Open Interest Reaches Record High
Data indicates a 17% increase in XLM’s open interest (OI) in the last 24 hours, reaching $602.39 million. This surge suggests a significant influx of capital into the derivatives market, driven by growing trader interest.
The OI-weighted funding rate has jumped to 0.0327% from 0.0114% on Thursday, signaling a bullish sentiment in trading activity. Bullish traders are paying these positive funding rates to offset the difference between exchange and spot prices, which arises from increased buying pressure in the derivatives market.
The recent rally in XLM has led to the liquidation of $6.06 million in short positions in the last 24 hours, compared to $2.91 million in long positions, indicating a squeeze on bearish traders.
Peter Brandt Outlines Conditions for a Stellar Rally
Analyst Peter Brandt shared a monthly chart of the XLM/USDT price, highlighting a range-bound movement with an upper limit at the $1.00 psychological level.
Brandt suggests a highly optimistic price target of $7.23 if XLM decisively closes above the $1.00 mark. However, he emphasizes a crucial second condition: “XLM MUST HOLD above the April low.”
Failure to maintain above the April low of $0.20 could prolong the range-bound movement.
XLM’s Breakout Rally Pauses Near $0.50
Stellar is currently maintaining its breakout rally from a descending triangle on the daily chart, facing resistance at the $0.50 psychological level. The intraday price movement of XLM reflects indecision, as indicated by a Doji candlestick pattern forming on the daily chart.
However, the 24-hour high of $0.52 marks a new year-to-date high for XLM. The altcoin has risen 105% so far in July, with buyers aiming to reclaim the $0.50 level.
A daily close above this level could extend the bullish trend to the December high of $0.56. Beyond that, buyers might target the 1.272% Fibonacci level at $0.72, drawn between the December 1st close at $0.56 and the April 8th close at $0.22.
The Moving Average Convergence Divergence (MACD) indicator and its signal line are rising in positive territory, supported by increasing green histogram bars. This could be interpreted as a sign of growing bullish momentum.
The Relative Strength Index (RSI) is at 85, trending sideways in overbought territory amid extreme buying pressure.
Conversely, a reversal from the $0.50 level could lead to a deeper correction in XLM down to the 78.6% Fibonacci retracement level at $0.45.
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