The daily timeframe shows that the XLM price went parabolic last week, hitting a high of $0.5145 as the crypto market rally intensified. This surge pushed it significantly higher than its recent moving averages, while oscillators such as the Stochastic and the Relative Strength Index (RSI) reached extremely overbought levels.
The main risk that the Stellar price faces is known as mean reversion. This refers to a situation where assets that have deviated so much from their moving averages move back close to them.
XLM formed a mean reversion in November last year when it surged by nearly 500% and deviated from its moving averages. It then dropped gradually until it closed that gap months later.
The other risk that the Stellar Lumens price faces is that it has deviated substantially from the upper side of the descending channel that connects the highest and lowest swings since December last year.
