Stellar Open Interest Jumps 127% – Can XLM Price Reach a Yearly High?

Stellar (XLM) has recently experienced a significant surge in price, marking a 5-month high. As a result, XLM has become one of the top-performing cryptocurrencies in the market. 

While the rise is being fueled by growing trader conviction, there are concerns that the altcoin might be overheating, which could influence the outcome of its price movement in the coming days.

Stellar Traders Are Bullish

Open Interest (OI) in XLM has seen a sharp increase, rising by 127% to $346 million from $160 million just last week. This surge in OI indicates that investors are becoming more involved, likely driven by FOMO (fear of missing out). 

The growing interest in the asset aligns with a positive funding rate, suggesting that traders remain optimistic about XLM’s potential.

The increase in open positions signals that confidence is building, potentially preventing a sharp price crash. However, such rapid growth may also lead to short-term overextension, so market participants must remain cautious.

XLM Open Interest. Source: Coinglass

The Chaikin Money Flow (CMF) indicator for XLM also points to strong inflows, showing that money is consistently entering the market. This bullish trend reflects positive investor sentiment and a growing belief in Stellar’s long-term potential. 

However, historically, when the CMF crosses the 20.0 threshold, it signals overbought conditions, which could lead to a price correction.

As XLM continues to experience significant bullishness, the risk of overheating increases, and a cool-down period may be imminent. Investors need to watch these technical indicators closely for signs of a potential price pullback.

XLM CMF. Source: TradingView

Can XLM Price Continue Rising?

XLM price has surged by 21% in the past 24 hours, trading at $0.436, just under the critical resistance level of $0.439. The altcoin has gained 83% this month, a clear sign of increasing investor interest. 

However, with the price nearing resistance, a period of consolidation between $0.412 and $0.439 is expected. If selling pressure increases, the price may drop back to $0.355, forming a new support level.

XLM Price Analysis. Source: TradingView

If the bullish momentum continues into the next week, XLM could break through the $0.439 resistance, advancing toward the $0.500 mark.

A move above $0.500 would validate the continued bullish outlook, confirming a sustained uptrend. However, if market sentiment shifts, the altcoin could experience a correction, invalidating the bullish thesis.