The price of Stellar (XLM) has skyrocketed over the past 24 hours, making it the second biggest gainer of the day after XRP. This rise can be attributed to the recent legal victory of Ripple Labs, which confirmed that XRP is not considered a security in the United States.
Jed McCaleb co-founded Stellar and Ripple, so their prices can sometimes show similar trends. Over the past day, XLM is up more than 46%, with gains of around 50% on the weekly chart.
The technical outlook for the currency is showing a strong bullish influence, as demand and accumulation are seeing a significant increase.
However, it is important to note that with any rally, there is always the possibility of a price pullback. XLM must keep the price above a certain mark to avoid bears taking over. The increase in the market capitalization of XLM is also a bullish sign, as it indicates higher buying volume.
XLM Price Analysis: 1-day chart
As of this writing, XLM is trading at $0.143 and is following a similar price path to XRP. The last time XLM reached this price level was in May last year; This marked an annual appreciation of the currency.
The general resistance for Stellar (XLM) is currently at $0.160, and a break through this level will support the upside.
If XLM can break this resistance level, it could reach $0.180, which could be a difficult resistance level for the coin.
The local support for XLM is currently at $0.131, and if the price drops to this level, bears may take over, which could cause the price to drop to $0.111. Stellar (XLM) trading volume is up a whopping 3,390%, indicating a strong bullish sentiment.
Technical Analysis
On the daily chart, XLM is considered to be overvalued and has entered the overbought territory. The Relative Strength Index (RSI) was just below the 80 mark, which indicates buying strength in the market.
XLM is also positioned above the 20 simple moving average (SMA). This also confirmed that the buyers were the driving force behind the price momentum in the market.
XLM formed buy signals in response to demand. The Moving Average Convergence Divergence (MACD) indicator has shown price momentum and a potential reversal. The indicator formed two long green histograms corresponding to buy signals increasing in volume.
This indicates that the price may continue to rise before the correction, which indicates that the current price level may be an entry point for traders.
The Directional Movement Index (DMI) was also positive, with the +DI line (blue) above the -DI line (orange), indicating positive momentum for the currency. The Average Directional Index (ADX) was above the 40 mark, which indicated that the price momentum was gaining strength on the intraday chart.
Featured image from Stellar.org, charts from TradingView.com