Stellar (XLM) is currently experiencing strong bullish momentum, with its RSI exceeding 70 as clear evidence, while ADX indicates that the market is forming a strong trend.
XLM is approaching the key resistance level of $0.30, but traders should be cautious of potential short-term pullbacks due to overbought conditions.
The support level at $0.279 is still crucial for maintaining this upward trend; if this level fails to hold, a significant pullback may occur.
With overbought signals appearing, Stellar (XLM) has risen nearly 19% in a week, approaching key resistance levels; traders are watching the critical support level at $0.279.
Is Stellar (XLM) overheating? RSI reached 71.5
Stellar (XLM) is currently showing strong bullish momentum. Its Relative Strength Index (RSI) has climbed to 71.5, a significant increase from 55.2 three days ago.
This rapid increase indicates a surge in buying activity, reflecting investors' increased confidence in XLM's short-term price movements. This quick shift also indicates that the outlook for Stellar has rapidly turned from neutral to more positively bullish, attracting traders who focus on momentum indicators to find strategic entry and exit points.
While a sharp rise in RSI typically indicates strong demand, it may also suggest that the asset is nearing a state of tension, potentially increasing volatility.
RSI, or Relative Strength Index, is a technical indicator used to measure the strength and speed of recent price movements of an asset. Readings above 70 typically indicate an overbought condition, while readings below 30 indicate an oversold level.
When RSI exceeds 70, it often signals a pause or slight pullback in the asset as buying momentum strengthens. Stellar's (XLM) RSI is currently at 71.5, officially placing it in the overbought zone. This situation suggests that although bullish sentiment is dominant, if momentum weakens or traders begin to take profits after a recent surge, prices may face a pullback risk.
XLM trend momentum is strengthening, with buying pressure dominating.
The Stellar Directional Movement Index (DMI) indicates that trend momentum is strengthening, with the Average Directional Index (ADX) at 37.41, a significant rise from 26.56 two days ago.
The significant rise in ADX confirms that market participants are firmly betting on the current upward trajectory, indicating strong trends. Typically, an ADX above 25 signifies that a trend has clearly begun. XLM's ADX is nearing 40, indicating that the upward trend is established and continues to strengthen, making it increasingly attractive to momentum traders and technical analysts.
ADX measures trend strength but does not indicate direction. It fluctuates between 0 and 100, with below 20 indicating weak trends and above 25 indicating strong momentum.
In addition to ADX, the DMI tracks two key lines: the Positive Directional Indicator (+DI) that captures upward pressure, and the Negative Directional Indicator (-DI) that measures downward pressure.
XLM's +DI has risen from 22.81 two days ago to 33.59, but has slightly retreated from a recent peak of 36.47, indicating significant short-term volatility under overall strong buying pressure. Conversely, -DI has sharply dropped from 19.8 three days ago to 9.91, highlighting a significant decrease in selling pressure.
Overall, these indicators reinforce the view that XLM is still in an upward trend. However, the slight fluctuations in +DI suggest that although bullish strength is dominant, buying enthusiasm may face a brief pause before further increases.
The strong bullish trend is intact, but the key support level at $0.279 must be maintained.
Stellar's Exponential Moving Average (EMA) indicates a strong bullish trend, with the short-term EMA positioned above the long-term EMA, signifying sustained upward momentum.
The next major resistance level is around $0.30, a psychological threshold that may temporarily slow XLM's rise.
However, if XLM prices break through the $0.30 barrier, it could open the way to $0.349 or even $0.37, marking XLM's first breakthrough above the $0.35 mark since March 2.
On the other hand, the support level at $0.279 has become crucial for maintaining the bullish structure. Successfully retesting this support level could help the price achieve healthy consolidation before a new round of increases, while a clear drop below $0.279 could trigger a more pronounced pullback.
In the event of a breakdown, XLM prices could fall to the next important support level of $0.258, and if selling intensifies, a deeper retracement to $0.239 or even $0.20 could occur.
In summary, Stellar (XLM) is at a critical moment, characterized by strong bullish momentum interwoven with emerging resistance levels. As this asset enters the overbought zone, traders should closely monitor key support levels and remain vigilant for potential pullbacks. Indicators suggest that a strong trend has formed, but closely tracking key price levels is crucial for understanding the asset's ongoing performance.