Stellar (XLM) is showing impressive bullish momentum, rising nearly 19% over the past week. As the token pushes toward key resistance levels, technical indicators suggest that the buying pressure is accelerating. Currently, XLM’s market cap has reached nearly $9 billion, with its price approaching $0.30. However, the recent surge has raised concerns about potential short-term pullbacks, as the asset enters overbought territory.

Strong Bullish Momentum and Overbought Conditions

Stellar has been experiencing a strong surge in buying interest, with its Relative Strength Index (RSI) climbing to 71.5. The RSI is a key technical indicator that helps assess the speed and strength of price movements. A reading above 70 typically signals that an asset is overbought and could be due for a price correction.

In this case, the RSI surge from 55.2 to 71.5 in just a few days points to strong demand for XLM. However, the rapid increase also suggests that the price may be nearing a period of consolidation or short-term pullback as traders lock in profits. While the bullish sentiment remains dominant, the overbought conditions could lead to volatility in the near term.

Key Indicators Suggest a Strong Uptrend

Despite the overbought conditions, several technical indicators signal that Stellar’s uptrend is well-established. The Average Directional Index (ADX) has increased sharply from 26.56 to 37.41 in just two days, confirming a strong and sustained trend. An ADX reading above 25 indicates that the trend is gaining strength, and with XLM’s ADX approaching 40, the uptrend is becoming increasingly powerful.

Additionally, the Positive Directional Indicator (+DI) remains firmly above the Negative Directional Indicator (-DI), showing that buying pressure continues to dominate the market. The ADX and DMI charts suggest that XLM remains in a strong uptrend, but with minor fluctuations in buying pressure, short-term pullbacks remain possible.

Resistance at $0.30 and Critical Support at $0.279

As Stellar pushes toward the key resistance level of $0.30, traders are closely watching for a potential breakthrough. If XLM manages to break above this level, it could open the door for further gains, with targets set at $0.349 and $0.37. A move above $0.35 would mark a significant milestone for XLM, representing the highest price since March 2.

On the downside, the support level at $0.279 is crucial for maintaining the bullish momentum. If XLM can hold above this support, it may consolidate and prepare for another leg higher. However, a drop below $0.279 could trigger a correction toward the next major support at $0.258. If selling pressure intensifies, deeper retracements toward $0.239 or even $0.20 could be on the horizon.

Conclusion: Bullish Trend with Caution

Stellar (XLM) is currently experiencing strong buying interest, with impressive momentum driving its price higher. The surge in RSI and the increasing ADX signal that XLM remains in a strong uptrend. However, the asset is approaching overbought conditions, and short-term pullbacks are possible.

Investors should keep a close eye on the support level at $0.279, as it will be key to maintaining the bullish structure. If XLM can break through $0.30 and sustain its momentum, further gains could follow. However, if the price fails to hold above key support levels, corrections to lower levels may occur.