Stellar (XLM) has kicked off the new year with a strong surge, gaining over 6% in the past 24 hours. This positive momentum is accompanied by encouraging technical indicators, suggesting a potential uptrend for the cryptocurrency.
DMI Signals Growing Buying Pressure
The Directional Movement Index (DMI) for XLM is showing signs of increasing bullish strength. The +DI (Directional Indicator) has surged significantly, while the -DI has declined, indicating a shift in momentum from selling pressure to buying pressure.
The ADX (Average Directional Index), which measures the strength of the trend, is also showing signs of increasing strength, albeit from relatively low levels. If the ADX continues to rise and the +DI maintains its dominance over the -DI, it could signal a significant shift in market sentiment and pave the way for a sustained uptrend.
Read more: XRP Up 11%, But Stellar (XLM) Steals the Show with 100% Surge!
Chaikin Money Flow (CMF) Turns Positive
The Chaikin Money Flow (CMF), an indicator that measures the flow of money into and out of an asset, has recently turned positive for XLM. This shift from negative to positive territory suggests that capital inflows are now exceeding outflows, indicating a potential shift in investor sentiment towards accumulation.
Price Action and Technical Analysis
XLM is currently trading between key support and resistance levels. The $0.31 level represents a crucial support zone, while resistance is expected at $0.406 and $0.47.
Read more: Stellar Plummets 10% in a Week: $10B Market Cap Imminent?
The EMA lines for XLM are currently positioned in a bearish configuration, with short-term EMAs below long-term EMAs. However, there are signs of a potential golden cross, where the short-term EMAs cross above the long-term EMAs, which could signal a significant shift in momentum.
Potential for a 32% Rally
If the current bullish momentum continues, with the DMI and CMF remaining positive and the EMA lines forming a golden cross, XLM could potentially rise towards the $0.406 resistance level. A successful break above this level could open the door for further gains, potentially leading to a 32% rally from current levels.
Read more: Stellar (XLM): $10B Market Cap at Risk as Bearish Storm Brews!
Conclusion
Stellar (XLM) has shown encouraging signs of recovery, with a 6% price increase and positive technical indicators suggesting a potential uptrend. However, it’s crucial to monitor key support and resistance levels, as well as the continued strength of the DMI and CMF, to assess the sustainability of this bullish momentum.
Disclaimer: This article is for informational purposes only and should not be construed as financial advice. Cryptocurrency investments involve significant risks, and investors should conduct thorough research before making any investment decisions.
