- In the past week, the price of XLM has increased by double digits.
- With changing sentiments, there could be a price cut this week.
With a double-digit gain of nearly 25% in the past seven days, Stellar Lumens [XLM] ranked as the second crypto asset with the highest price growth in the past week, according to data from CoinMarketCap.
Read Stellar Lumens’ [XLM] Price Forecast 2023-24
Over the past month, XLM’s value rose 78%. This happened despite sharing a statistically significant positive correlation with leading Bitcoin [BTC]the price of which stagnated during the same period.
Profits are plentiful, but there is a catch
At the time of writing, Stellar’s native token changed hands at $0.155. The token entered another bull cycle on July 12, when the MACD line crossed the trendline in an upward direction. This crossover signaled the shift in momentum from bearish to bullish and confirmed the continuation of the existing price uptrend. XLM’s value has since increased by 67%.
A look at the alt’s Awesome Oscillator (AO) indicator also revealed that since mid-July, trades were mostly represented by tall green histogram bars that remained above the zero line. When an asset’s AO returns bars above the zero line, it suggests that short-term momentum is greater than long-term momentum, indicating bullish momentum.
Other key momentum indicators, the Relative Strength Index (RSI) and the Money Flow Index (MFI), were above their respective center lines at the time of writing and have been for the past several weeks. With these indicators still on an upward trajectory, XLM accumulation has increased since the start of the bull run, hence the continued price growth.
Source: XLM/USDT on TradingView
An on-chain review of the token’s Open Interest confirmed that this has also grown. When an asset’s open interest rises, it indicates a substantial increase in the number of open positions in the market. With an associated price rally, the growth in Open Interest signaled an increase in trading positions opened by XLM traders.
Source: Coinglass
XLM navigates muddy waters
A closer look at XLM’s performance across the chain revealed that the new week could potentially be plagued by a price retrace. First, weighted sentiment tumbled into negative territory two days ago. At the time of writing, the stat remained below zero at -0.56. This suggests that investors began to lose confidence in a further price increase.
Source: Sentiment
As Open Interest rose, a review of XLM’s funding rates across several exchanges revealed an increase in the number of short positions opened against XLM. Although short traders have suffered losses due to XLM’s price growth, they continue to bet fervently on XLM.
Source: Coinglass
How Much Are 1,10,100 XLMs Worth Today?
In addition, the price of XLM on a D1 chart was trading dangerously close to the upper band of its Bollinger Bands indicator. This indicated that the alt may be overbought. And that a price correction was lurking on the horizon.
Finally, despite the price increase, the Chaikin Money Flow showed a downward trend. This created a bearish divergence that is often taken as a sell signal by traders.
Source: XLM/USDT on TradingView
