Bittime - Stellar (XLM) price is currently facing conflicting technical signals, amid a deepening downtrend. In the past 30 days, XLM has fallen 29% from its highest level since 2021.
The Existence of the XLM Death Cross Pattern
The formation of a death cross pattern that occurred on December 20 indicates increasing bearish pressure, although a spike in buying activity could signal a potential trend reversal.
XLM Directional Movement Index (DMI) Indicator December 24-25
The DMI shows increasingly strong downward momentum with the Average Directional Index (ADX) value above 25.
However, the dramatic spike in Chaikin Money Flow (CMF) reaching 0.19 indicates significant accumulation by institutions.
This technical divergence creates a critical phase for XLM, with immediate support at the Rp5,022 level (equivalent to $0.31) and potential resistance at Rp6,480 (equivalent to $0.40) if bullish momentum begins to build.
DMI XLM | TradingView/BeInCrypto
XLM DMI Shows Strong Bearish Trend
The DMI for Stellar shows increasing trend strength, with the ADX rising from below 20 to 26.8 in just four days.
ADX measures the strength of a trend regardless of direction, with readings below 20 indicating a weak trend, 20-25 indicating a growing trend, and values above 25 indicating a strong trend. When ADX rises above 25, it indicates that the current trend is strengthening and is likely to continue.
The current reading for D+ is 13.2 and D- is 21.5, which combined with ADX rising to 26.8, paints a bearish picture for XLM price. Since D- (negative directional indicator) is higher than D+ (positive directional indicator), it confirms the bearish nature of the trend.
The ADX rising above 25 indicates that this downtrend is gaining strength and could continue, with the significant gap between D- and D+ strengthening the likelihood of continued downtrend price action.
Stellar CMF Surge in the Last 24 Hours
Chaikin Money Flow (CMF) for XLM has seen a dramatic increase, jumping from 0.03 to 0.19 in 24 hours.
The CMF indicator combines price and volume to measure buying and selling pressure.
Positive values above zero indicate accumulation, while negative values indicate distribution. The magnitude of the reading (the closer it is to +1 or -1) indicates the strength of the money flow.
CMF Institutional Buying Pressure and XLM Accumulation Quite Strong
The CMF's jump to 0.19, the highest reading since November 24, signals strong buying pressure and institutional accumulation.
The substantial increase from neutral territory (0.03) to a significant positive value indicates a marked shift in sentiment, with money flowing into Stellar at an increased pace.
CMF | TradingView/BeInCrypto
When the CMF shows a dramatic positive shift, it often precedes an upward price move as it indicates strong buying conviction from larger market participants.
XLM Price Prediction: Will the Downtrend Continue?
TradingView/BeInCrypto
XLM price recently showed a significant bearish signal with the formation of a death cross on December 20, where the short-term moving average crossed below the long-term moving average.
Also read Reasons to Invest in Stellar (XLM): Take a Look Before You Buy!
Death Cross Signals Increasing XLM Selling Pressure
This technical pattern suggests increasing selling pressure, with the immediate support level at Rp5,022 (equivalent to $0.31) being crucial for price stability. If this support fails to hold, XLM price could see a further decline towards the Rp4,050 (equivalent to $0.25) level, which represents significant downside risk.
Also read How to Buy Stellar (XLM)
CMF Signals Trend Reversal and Upward Momentum
However, the latest data from Chaikin Money Flow shows potential for a trend reversal and upward momentum.
If Stellar price can capitalize on this positive money flow and establish an uptrend, it could challenge immediate resistance at IDR6,480 (equivalent to $0.40).
A break above this level could open the way for further upside towards Rp7,644 (equivalent to $0.47), which offers a potential upside of 34% from current levels, although this scenario requires sustained buying pressure to overcome the current bearish technical setup.
FAQ
1. What is Stellar (XLM) and how does it work?
Stellar is a blockchain platform designed to facilitate fast and low-cost international money transfers. XLM is the native token of the Stellar network, used to pay transaction fees and as an intermediary currency in exchanges.
2. How to buy Stellar (XLM)?
You can buy Stellar (XLM) through the Bittime cryptocurrency exchange. Register an account, verify your identity, and make a deposit using fiat currency or other cryptocurrencies.
3. What affects the price of Stellar (XLM)?
The price of Stellar (XLM) is influenced by a variety of factors, including market demand and supply, news and developments related to the Stellar project, and the overall cryptocurrency market conditions. Technical and fundamental analysis can also provide insight into price movements.
4. Is Stellar (XLM) a good investment?
The decision to invest in Stellar (XLM) depends on your investment goals, risk tolerance, and market analysis. While Stellar has the potential for growth, it is important to conduct thorough research and consider factors that may affect the price before investing.
Reference
Tiago Amaral, Stellar (XLM) Price Shows Signs of Life Despite Bearish Pattern, Diakses 24 Desember 2024
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