Stellar (XLM) is on a roll, with the price recently surging above $0.45, marking an impressive 32% rally so far this week. As of Friday, XLM continues to trade higher, suggesting that the momentum is not slowing down anytime soon. The cryptocurrency’s recent price action has captured the attention of investors, with many analysts forecasting that the altcoin could extend its gains by another 40%, potentially reaching $0.63 in the coming weeks.

The Bullish Indicators: On-Chain Data and Technical Signals

Several factors are contributing to Stellar’s positive outlook. On-chain data, including Open Interest (OI) and Total Value Locked (TVL), is pointing to increasing market participation, which could fuel further gains. Additionally, the technical indicators are painting a bullish picture for XLM’s price, suggesting that the current rally may just be the beginning.

Stellar’s Price Surge: From $0.31 to $0.45 in Just Days

Stellar’s price found solid support around the $0.31 level earlier this week, and from there, it rallied more than 27% in just three days. As of Friday, XLM is trading at $0.45, up 4% on the day. The upward momentum has many analysts optimistic that the cryptocurrency could continue its climb, with a target of $0.63, which would represent a 40% increase from current levels.

Technical Indicators Point to Continued Bullish Momentum

The Relative Strength Index (RSI) on XLM’s daily chart is currently at 60, which is above the neutral 50 mark and trending upwards. This indicates that bullish momentum is in play. Additionally, the Moving Average Convergence Divergence (MACD) indicator, which tracks changes in the strength and direction of a trend, showed a bullish crossover on Tuesday. The MACD’s blue line crossing above the signal line (orange) is a classic buy signal, reinforcing the expectation of continued upward movement.

Open Interest and TVL: Strong Signals for Further Gains

On-chain metrics are also signaling that more money is entering the market, further supporting the bullish outlook for XLM. Coinglass data reveals that the futures’ Open Interest (OI) in XLM has risen sharply, increasing from $126.86 million on Wednesday to $274.11 million on Friday. This surge in OI is the highest level seen since December 10, 2024, and indicates that fresh capital is being injected into the market, which could drive the price higher.

Additionally, data from DefiLlama shows that XLM’s Total Value Locked (TVL) has been steadily rising. TVL increased from $44.95 million on Tuesday to $54.59 million on Friday, marking a significant uptick in just a few days. The rising TVL suggests that more users are depositing and utilizing assets within the Stellar ecosystem, signaling growing interest and activity in XLM-based protocols. This could further bolster the case for a price rally.

Potential Risk: A Drop Below $0.31 Would Change the Outlook

While the bullish outlook for XLM remains strong, there is a key level to watch. If the daily candlestick closes below $0.31, the current bullish thesis would be invalidated. In such a scenario, XLM could see further declines, potentially retesting its next support level at $0.29, which aligns with the 100-day Exponential Moving Average (EMA). A drop below this level would suggest that the rally has lost steam and could lead to a deeper correction.

Conclusion: Stellar’s Future Looks Bright – For Now

Stellar’s impressive price rally, combined with positive on-chain data and technical indicators, suggests that XLM is well-positioned for further gains. The 40% upside target to $0.63 looks achievable if the current momentum continues. With growing Open Interest and TVL, as well as bullish technical signals, Stellar bulls are hoping for a continuation of the rally.

However, traders should remain cautious and monitor the $0.31 level closely. A daily close below this level could signal a reversal, so it’s essential to keep an eye on market developments.

In the coming weeks, all eyes will be on Stellar as it aims for new highs, with the potential for a double-digit rally on the horizon.