XLM Price Breaks Downtrend: Big Altcoin Surge Ahead?

The Stellar Lumens (XLM) cryptocurrency has stunned the market this week, after a massive rise of nearly 30% over the last few days, since 16 April.

Crypto traders continue scrambling to understand what could be behind this spike. A mix of general market behavior, as well as some unusual transactions involving Bitcoin, might provide some clues.

A Rally Within Days

Stellar started on 16th April with a price of around $0.23 but quickly shot up to a high of $0.3.

This formed a massive green candlestick on the weekly chart. It was as well as one of the cryptocurrency’s strongest weekly performances over the last few months. Interestingly, it also helped the cryptocurrency break out from a trading range it had been stuck in since last year.

At the time of writing, XLM was up by around 28% over the last 10 days. It was trading at around $0.2820.

There is currently no valid on or off-chain explanation for this rally. However, several developments show an interesting picture.

First of all, the overall crypto market showed a great deal of strength early on Monday. Many altcoins have been trading in the green over the last week, in a show of better investor appetite.

As it stands, XLM crypto was especially set up for benefiting from this price increase with its similarities to the popular XRP. This intense buying spree might have injected liquidity into the XLM market and caused the price spike.

Breaking Through Long-Term Resistance

Before this breakout, XLM had been climbing from its April low of around $0.2. 

The cryptocurrency even crossed above its major daily moving averages. That included the 50-day at $0.258, and is looking towards breaking above the 200-day at $0.3.

Both of these moving averages have historically been seen as important milestones for assets, when it comes to bullish momentum. This rally allowed XLM to escape a falling wedge formation it had been stuck in since December of last year.

As such, XLM price hitting $0.3 means that the cryptocurrency is now at highs last seen since May of 2021 during the tail end of the previous crypto bull market. If XLM price can maintain its positive momentum and close the week in the green, this would mean that the cryptocurrency is confirmed bullish, and will likely travel further up.

According to analyst Satori, $XLM has broken out of the macro downtrend, and is looking towards its next move to the upside.

However, the analyst notes that there might be another resistance zone to watch out for ahead, especially around $0.3 (or the 200-day moving average) mentioned above.

On-Chain Indicators Turn Bullish

On-chain indicators show that big price moves could be inbound for Stellar as well. According to Coinglass data, while weighted funding rates have mostly been bearish over the last year, they have turned green again over the last week, alongside the bullish comeback of the rest of the market.

Alongside this return of investor interest, the derivatives market also shows that funding rates have recovered from a low of $127 million in March, to $164 million as of writing. This indicates that more investors are interested in Stellar within the derivatives market, and are pumping more money into open positions.

Overall, this could do much to help the cryptocurrency overcome this $0.3 price resistance and target even higher highs. The Fibonacci retracement tool shows that a retest of the $0.275 price level is possible for Stellar.

However, if the bulls step in, the cryptocurrency could rebound from this price level and jump by 60% to the next high at around $0.41. However, a failure to maintain its standing around this $0.275 zone could lead to a further decline towards $0.2.

The post XLM Price Breaks Downtrend: Big Altcoin Surge Ahead? appeared first on The Coin Republic.