- Stellar (XLM) has shown strong bullish momentum, trading above $0.45 with a potential for a 40% rally to retest its high of $0.63.
- Rising Open Interest and Total Value Locked (TVL) reinforce this bullish outlook, although caution is advised if the daily candlestick closes below $0.31.
A Bullish Outlook for Stellar (XLM)
Stellar (XLM) has been making significant gains, trading above $0.45 on Friday after rallying more than 32% so far this week. This surge is supported by rising on-chain data, including an increase in Open Interest (OI) and Total Value Locked (TVL), which paint a bullish picture for the cryptocurrency’s future.
Stellar’s Recent Rally and Market Sentiment
After finding strong support around the $0.31 daily level on Monday, Stellar saw a remarkable 27% rally in just three days. By Friday, XLM continued to rise, maintaining a 4% increase to $0.45. This upward momentum has fueled speculation of a potential 40% rally, bringing the cryptocurrency back to its high of $0.63 from November 24, 2024.
Key Indicators Support Bullish Sentiment
The Relative Strength Index (RSI) on Stellar’s daily chart currently reads 60, above the neutral value of 50, indicating strong bullish momentum. Furthermore, the Moving Average Convergence Divergence (MACD) indicator displayed a bullish crossover on Tuesday, with the blue line crossing above the orange signal line, signaling continued upward movement.
Increasing Open Interest and TVL
Coinglass data reveals a substantial increase in Stellar’s futures Open Interest (OI), which rose from $126.86 million on Wednesday to $274.11 million on Friday. This surge marks the highest level since December 10, 2024, suggesting significant new money entering the market and supporting a potential rally.
Similarly, DefiLlama data highlights an increase in XLM’s Total Value Locked (TVL), which grew from $44.95 million on Tuesday to $54.59 million by Friday. This consistent rise in TVL reflects a growing interest and utilization of assets within the Stellar ecosystem, reinforcing the bullish outlook.
Risks and Caution
Despite the optimistic outlook, caution is advised. The bullish thesis could be invalidated if Stellar’s daily candlestick closes below $0.31. Such a move could push XLM towards its next support level at $0.29, aligned with its 100-day Exponential Moving Average (EMA).
Conclusion
Stellar’s recent price movements and growing on-chain metrics suggest a strong bullish sentiment. With key indicators pointing towards further gains and rising interest, XLM could potentially reach new highs. However, market participants should remain vigilant and prepared for potential volatility, especially in light of technical support levels.
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