- Stellar (XLM) is experiencing strong bullish momentum, with a 19% rise in the last week and its RSI surpassing 70, signaling overbought conditions.
- The cryptocurrency is approaching key resistance at $0.30, and maintaining support at $0.279 will be crucial to sustain the uptrend.
Stellar (XLM) has been riding a wave of strong bullish momentum, experiencing significant buying interest as its market dynamics heat up. In the past week, XLM has surged nearly 19%, pushing its market capitalization to nearly $9 billion. But is this momentum sustainable, or is the asset approaching a point of overheating? Let’s break down the latest technical developments.
Stellar Approaches Key Resistance at $0.30
Stellar’s recent rally has put it in close proximity to a key resistance level at $0.30. With this strong upward move, XLM is drawing the attention of both retail and institutional investors. The Relative Strength Index (RSI) has surged above 70, indicating that the cryptocurrency is now in overbought territory. While this is a clear sign of intense demand, it may also signal that the asset could face short-term pullbacks if momentum slows down.
RSI Above 70: Is XLM Overbought?
The RSI for XLM has recently hit 71.5, up significantly from 55.2 just three days ago. This sharp increase shows a surge in buying activity, suggesting that investors are bullish on Stellar’s prospects in the short term. However, such a rapid rise in RSI often raises concerns about a potential correction. When the RSI crosses above 70, it’s typically a warning that the asset could be overheated, making it vulnerable to consolidation or minor pullbacks as profit-taking sets in.
The ADX Confirms Strengthening Uptrend
Despite the overbought conditions, Stellar’s trend momentum is undeniable. The Average Directional Index (ADX), which measures the strength of a trend, has risen sharply from 26.56 to 37.41 in just two days. An ADX above 25 suggests that a strong trend is in place, and with the ADX now nearing 40, XLM’s uptrend is gaining momentum. This signals that market participants are highly committed to the prevailing bullish direction, attracting more attention from traders looking to ride the wave of this sustained rally.
Support at $0.279: A Critical Level for Bulls
To maintain the current bullish momentum, the critical support level at $0.279 must hold. If XLM fails to hold above this level, the cryptocurrency could experience deeper corrections, leading to a shift in sentiment among traders. However, as long as this support level remains intact, the uptrend remains well-supported.
What’s Next for Stellar (XLM)?
As Stellar approaches key resistance at $0.30, the question remains: Will the bullish momentum continue, or will overbought conditions trigger a short-term correction? With rising ADX and RSI levels, XLM appears to be in a strong uptrend, but traders should watch for any signs of overheating as the price faces potential pullbacks. Staying above the $0.279 support level will be crucial for sustaining the bullish sentiment and keeping the uptrend intact.
