Stellar (XLM) has been one of the standout performers in the cryptocurrency market over the past month, surging an impressive 433% to reach $0.63—its highest price since 2021. The cryptocurrency’s meteoric rise has captured the attention of traders and investors alike, drives conversations about whether XLM can continue its upward momentum and potentially hit $0.70. However, recent technical indicators suggest that Stellar may face some roadblocks, with signs of slowing momentum that could delay its progress toward that coveted price target.

Technical Indicators Signal a Slowdown in Momentum

Despite Stellar’s significant price surge, two key technical indicators, the ADX (Average Directional Index) and CMF (Chaikin Money Flow), are now signaling that the rally could be losing steam. These indicators are crucial tools for traders, offering insights into the strength and direction of trends.

• ADX Drops Below 25: The ADX is a widely used tool for assessing the strength of a trend without indicating its direction. A reading above 25 typically suggests a strong trend, while anything below 20 signals a weak trend. Just a few days ago, XLM’s ADX was above 40, indicating a strong bullish trend. However, the latest data shows the ADX has fallen to 23.6, suggesting that the momentum driving the price upward is beginning to fade. While this does not necessarily mean the end of the bullish trend, it does imply that a period of consolidation may be imminent.
• CMF Turns Negative: The CMF measures the flow of money into and out of an asset, helping traders gauge the buying and selling pressure. Positive values suggest buying pressure, while negative values indicate selling dominance. For the past three days, XLM’s CMF has remained negative, currently sitting at -0.16. This suggests that selling pressure is outweighing buying, which could limit further gains. Notably, the negative CMF isn’t extreme, indicating a moderate selling phase, but it still signals that the bullish momentum may not be sustainable unless buying activity picks up again.

Can XLM Continue Its Ascent?

While the recent technical readings point to a potential slowdown, the overall bullish trend for Stellar remains intact. The price has held strong, with $0.63 being a key resistance point. The fact that XLM has already gained more than 400% in a month suggests there is strong market interest, and the sentiment surrounding Stellar remains positive.

Currently, XLM’s DMI (Directional Movement Index) shows a positive directional indicator (D+) at 24.7, higher than the negative directional indicator (D-) at 14.9. This indicates that buying pressure is still outpacing selling, supporting the continuation of the uptrend in the short term. However, for XLM to break through $0.70 and continue its rally, the ADX would need to rise back above 25, signaling stronger momentum. Without this, Stellar’s price action may be limited to a more modest range or even face some retracement.

Consolidation Could Be in the Cards

As XLM has experienced such rapid growth, it is not uncommon for the cryptocurrency to undergo a period of consolidation. Market cycles often include phases of pullbacks or sideways movement before a fresh breakout. If XLM fails to regain the bullish momentum required to push past its recent highs, it could find support at key levels, such as $0.41, where traders may look to re-enter positions.

The negative CMF could also lead to a short-term correction if selling pressure intensifies. Traders may decide to lock in profits, especially after such a huge surge in price, which could add to the downward pressure. However, a shift back to positive CMF territory would signal a resumption of buying interest, and XLM could break through resistance levels and aim for $0.70.

Key Levels to Watch

• $0.63 Resistance: XLM has recently tested $0.63 and is consolidating around this level. If the price can maintain above this resistance point, it will increase the chances of further upward momentum.
• $0.41 Support: If selling pressure continues to mount, $0.41 could act as a critical support level. A pullback to this zone would be a natural part of the market’s correction cycle, offering potential buying opportunities if the uptrend is to resume.
• $0.70 Target: While the path to $0.70 may be delayed, it remains a key psychological target. Traders and analysts alike will be watching to see if XLM can break through its current resistance and regain momentum.

Conclusion: Is XLM’s Rally Over?

While the 433% surge in Stellar over the last month is remarkable, recent technical signals suggest that its current rally could face challenges in the near term. With the ADX showing weakening momentum and the CMF indicating selling pressure, XLM may need to consolidate before it can push toward higher levels, like the coveted $0.70 mark.

For now, traders should keep an eye on the $0.63 resistance level and watch for any signs of recovery in the ADX and CMF. If the negative pressure continues, a correction could be on the horizon, with $0.41 acting as a potential support zone. The question remains: can Stellar reclaim its momentum, or will it face a period of consolidation? Only time will tell.