Stellar (XLM) has had a remarkable run over the past three weeks, high by 608% in just 21 days. This explosive growth has brought attention to the altcoin, now standing as one of the top performers in the crypto market. However, signs suggest that the rally might be cooling down, with a potential retracement phase underway.

Unprecedented Growth for Stellar

From November 4 to November 24, XLM surged by an astonishing 608%, driven by a bullish Bitcoin (BTC) rally and heightened interest in the broader cryptocurrency market. This rapid ascent saw Stellar’s trading volume soar, peaking at $2.83 billion last Sunday.

Despite this surge, Stellar remains 25% below its recent high, suggesting a phase of consolidation. As of now, XLM is still up by an impressive 390% compared to its position three weeks ago.

What’s Behind the Stellar Surge?

1. Increased Market Activity: The Chaikin Money Flow (CMF), a measure of capital inflows, has consistently remained above +0.15 since early November, indicating significant buying pressure.
2. Historical Context and Fibonacci Targets: Stellar’s all-time high of $0.8756, achieved in January 2018, serves as a reference point for future rallies. Current Fibonacci extension levels place the next bullish targets between $0.766 and $0.975.
3. Broader Market Trends: Bitcoin’s bullish performance has created a favorable environment for altcoins like Stellar to thrive, as investor sentiment remains optimistic across the board.

Retracement Signs and Key Support Levels

Despite the bullish momentum, there are signs that Stellar could be entering a retracement phase. The Money Flow Index (MFI), a technical indicator that measures buying and selling pressure, suggests that the pullback might deepen as XLM approaches critical Fibonacci support levels.

Key levels to watch include:

• $0.463: A zone with significant liquidation activity, acting as a potential short-term magnet for prices.
• $0.4: Another critical support level, identified through liquidity heatmaps and Fibonacci retracement analysis.

The liquidation map reveals a cluster of long liquidation positions near $0.463-$0.473, indicating that sellers could dominate in the short term, pushing prices lower.

Trading Volume and Liquidation Insights

Trading volume has been a defining factor in XLM’s performance. With daily volumes hitting billions, Stellar has experienced extraordinary market activity. However, liquidation data from Coinglass highlights two critical zones influencing price movement:

1. Upside Zone ($0.533 - $0.55): A liquidity pool closer to current prices, representing a potential resistance area if XLM attempts another rally.
2. Downside Zone ($0.4 - $0.463): A significant liquidity cluster that could serve as a support level if prices dip further.

What’s Next for Stellar?

While XLM’s surge has been impressive, the pullback could be a healthy sign of consolidation before its next move. Investors should watch how Stellar behaves around the $0.463 and $0.4 levels, as these zones will likely determine its short-term trajectory.

If support holds, XLM could resume its upward trend, potentially targeting the $0.533-$0.55 range before testing its Fibonacci bullish targets above $0.766. Conversely, a break below $0.4 could signal deeper retracements.

Conclusion

Stellar’s rapid ascent has been nothing short of phenomenal, showcasing the cryptocurrency’s potential to deliver outsized gains in a short period. However, the current retracement phase emphasizes the importance of cautious optimism. With critical support and resistance levels in play, XLM’s next move will provide valuable insights into its long-term prospects.