XLM faces sharp decline after recent bullish surge and volatility.
Critical $0.5 support level key for Stellar’s sustained recovery.
Stellar (XLM) recently captured market attention with a dramatic 90% weekly surge and has encountered a significant downturn. The cryptocurrency plummeted 13% in the past 24 hours, with an 18% drop in trading volume. This sharp correction comes just days after XLM reached a peak of $0.6376, trading now at $0.4332.
The abrupt price movement surprised the Stellar community, given its prior outperformance against Bitcoin since early November. Stellar’s valuation against Bitcoin had surged, marking a bullish shift as it broke past a series of lower highs and lows. This rise reflected renewed investor interest, with XLM recovering from prior lows to test higher resistance levels.
However, the current price action raises questions about XLM’s ability to sustain its rally. Immediate resistance levels for XLM stand at $0.4764 and $0.9579, while its supports are noted at $0.2610 and $0.1415. Market analysts highlight the importance of the $0.5 support zone. Stabilizing at this level could set the stage for a more sustained upward trend, but a failure to hold might lead to further declines.
Can XLM Give a Stronger Comeback?
Adding to the uncertainty, a short-term risk indicator for XLM has surged, signaling a heightened possibility of a market correction. Despite the recent setback, XLM’s drawdown from its all-time high has narrowed to 32.48%, reflecting partial recovery. This metric indicates Stellar is regaining ground from previous lows more effectively than in past cycles.
Market observers caution traders to approach XLM with strategic precision. Monitoring critical support levels and waiting for stabilization could mitigate risks amid volatility. The cryptocurrency’s current trajectory underscores the dynamic nature of the market, where bullish momentum can quickly shift.
As XLM’s price evolves, the focus remains on whether it can reclaim its bullish momentum or face prolonged consolidation amidst bubble concerns.
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