Amid market uncertainty, Ripple rival Stellar (XLM) has reached a critical make-or-break level, leaving investors and traders uncertain. The past few days have been unfavorable for the XLM token, with a 38% price drop. However, recent gains over the past two days appear to be shifting market sentiment.
During the continuous price drop, XLM seems to have faced consistent resistance from a descending trendline. However, the price is now on the verge of a breakout.
According to expert technical analysis, this level will be crucial for XLM in determining whether it will rally or plunge in the coming days. Based on recent price action and historical momentum, if XLM breaches this descending trendline resistance and closes a daily or four-hour candle above the $0.35 level, there is a strong possibility it could soar by 22% to reach $0.43 in the future.
On the other hand, if the asset fails to breach this level, there is a strong possibility it could plunge by 10% to reach the $0.30 level. Despite this prediction, XLM is currently trading above the 200 Exponential Moving Average (EMA) on the daily timeframe, which reinforces its uptrend.
At press time, XLM is trading near $0.346 and has surged over 3.50% in the past 24 hours. However, due to its confusing price action pattern, trader and investor participation declined during the same period, resulting in a 4% drop in trading volume.
Looking at the current price action, investors have been dumping XLM tokens, as reported by the on-chain analytics firm Coinglass. Data from spot inflow/outflow reveals that exchanges have witnessed an outflow of XLM tokens worth $4 million in the past 48 hours.
However, XLM’s open interest appears to be increasing and has surged by 9% in the past 24 hours, indicating growing trader interest in the asset and the formation of new positions over the past 24 hours.
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