Journalist
Posted:
- The value of XLM increased by 15% last week.
- However, short traders were anticipating a decline in prices.
With a 15% increase in value, Stellar [XLM] has ended the week as the cryptocurrency asset with the most gains in the past seven days, data shows CoinMarketCap showed. At the time of writing, the altcoin was exchanging hands at $0.13.
Source: CoinMarketCap
Read Stellar’s [XLM] Price forecast 2023-2024
The price jump occurred despite the fact that there was a statistically significant positive correlation with the leading coin Bitcoin [BTC]whose value grew by only 0.30% over the same period.
The spot market excels
The price increase over the past week is mainly due to renewed interest in XLM, which has led to a surge in new demand. Among traders in the token’s spot market, bulls regained control on September 4 and immediately began an intraday price increase of 8% during that day’s trading session.
At the time of writing, the Moving Average Convergence/Divergence (MACD) indicator confirmed that the bulls remained in control, with the MACD indicator above the trendline. Since September 4, the indicator only shows green histogram bars.
Furthermore, key momentum indicators pointed to increased XLM accumulation among daily traders. For example, the token’s Money Flow Index (MFI) was in an uptrend at 64.24, indicating that XLM accumulation exceeded the sell-off.
Similarly, the %K line (blue) of the altcoin’s Stochastic RSI indicator was pinned at 100%, indicating that the volume of XLM accumulation is exceeding its distribution. The stochastic RSI indicator measures momentum and identifies overbought and oversold conditions in the market.
At the time of writing, XLM was 100% overbought.
It is important to note that buyers often find it challenging to support further price increases at this overbought level. So a withdrawal could be imminent.
The slight pullback in XLM’s Chaikin Money Flow (CMF) also lent some credence to the above view. Although the token’s CMF is still above the midline and was positive at the time of writing, it has fallen since September 6.
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This indicated a decline in capital inflows into the XLM spot markets and signaled the start of profit-taking activity.
Source: XLM/USD, TradingView
Interestingly, futures markets are increasingly placing bets against the price of XLM. Data from Coinglass shows that funding rates on cryptocurrency exchanges have become increasingly negative since August 17.
Source: Coinglass