Stellar (XLM) has made waves in the cryptocurrency market after a remarkable 11% price surge within 24 hours. This rally has propelled Stellar ahead of SUI in terms of market capitalization, placing it as the 12th-largest cryptocurrency. With its current market cap at $14.21 billion, XLM is trading at $0.467, marking a significant high for the week. But what’s driving this rally, and can Stellar sustain its momentum to climb even higher?

Stellar’s Bullish Breakout

The latest price surge is backed by strong technical indicators. On its four-hour chart, Stellar formed a double-bottom pattern, a reliable signal for bullish continuation. The price broke through a key resistance level, converting it into support—a clear sign of an uptrend.

Analysts have identified $0.52 as the next key target for Stellar, a level based on the 1.618 Fibonacci extension. If achieved, this would mark a multi-week high for the cryptocurrency.

What’s fueling the rally?

• Increased Buying Volume: Stellar’s trading volume jumped significantly, with $154 million in buying activity recorded during the surge.
• Overbought Signals: The Relative Strength Index (RSI) has risen to 71, signaling strong momentum but nearing overbought territory.
• MACD Momentum: The Moving Average Convergence Divergence (MACD) indicator shows bullish momentum, with the MACD line moving upward.

These indicators collectively suggest that Stellar’s rally could continue, but caution is advised as the market approaches overbought conditions.

Risks on the Horizon

While the bullish momentum is promising, there are risks that could temper XLM’s rise. Recent data shows that short sellers were heavily impacted by the surge, with $1.5 million in short positions liquidated.

As a result, long traders are now driving the market, with funding rates turning positive. This means traders are willing to pay to maintain long positions, reflecting strong optimism. However, a liquidation heatmap reveals clusters of liquidation zones between $0.40 and $0.41.

If the price dips unexpectedly, these levels could act as magnets, triggering further liquidations and potentially causing a steep decline. Long traders should be mindful of these risks as they navigate the market.

Stellar’s Road to the Top Ten

Stellar’s impressive rally has  drives discussions about its potential to break into the top ten cryptocurrencies. With Avalanche (AVAX) holding the 11th spot at a $15.34 billion market cap, XLM is inching closer to overtaking it.

To secure a spot in the top ten, Stellar would need to surpass Tron (TRX), which currently holds a market cap of $19.5 billion. This would require an additional $5 billion in market value—a challenging but not impossible feat given XLM’s recent growth.

Notably, in the first five days of 2025, Stellar’s market cap surged from $9.8 billion to $14 billion. If this momentum continues, XLM could position itself as a serious contender for the top ten.

What’s Next for Stellar?

Stellar’s recent performance has highlighted its potential as a rising star in the crypto market. The key factors to watch include:

1. Price Targets: A move toward $0.52 could confirm the continuation of the uptrend.
2. Support Levels: Maintaining support above $0.40–$0.41 will be crucial to avoiding a steep pullback.
3. Market Sentiment: Sustained buying pressure and positive funding rates will be critical to Stellar’s upward trajectory.

For now, Stellar’s journey remains one of the most intriguing narratives in the crypto space. With its technical indicators showing strength and its market cap climbing, XLM could continue to capture the attention of investors in the weeks ahead.