TL; DR
- XLM is trading higher on Thursday after defending major support levels earlier this week.
- Rising Open Interest (OI) and favorable bond prices indicate that new funds are flowing into both markets.
- XLM is still below major resistance levels although it shows that bearish momentum is ending.
Stellar’s XLM continues to recover on Thursday, supported by improving derivatives and stability of technical indicators after the cryptocurrency defended key support levels earlier in the week.
Open Interest rises when traders return
Sources of information point to renewed trust among market participants. According to CoinGlassXLM Open Interest rose from $153 million on Monday to nearly $195 million, up 25% in the past 24 hours.
A rise in prices at the same time as Open Interest indicates that new funds are entering the market rather than traders simply closing positions. This often reflects a positive impact on the current recovery.
Market sentiment has also advanced on the perpetual futures market. XLM posted positive earnings after trading on Tuesday.
Positive investment income shows that traders with long positions pay more money to maintain their position, indicating the growth of sentiment.
While the derivative indicators are strong, the chain’s metrics paint a mixed picture. CryptoQuant shows that XLM continues to have strong selling power in the global market, indicating that large traders remain skeptical despite the recent pullback.
This imbalance can reduce the speed of any continuous movement.
XLM technical analysis: Recovery faces many technical hurdles
Stellar traded around $0.189 on Thursday after jumping from support near $0.177.
However, XLM continues to trade below the 50-day EMA at $0.190 and the 200-day EMA at $0.196.
The indicator is moving above its 100-day EMA at $0.187, providing immediate support.
Momentum indicators show that buyers are slowly coming back but be cautious. The RSI is near 49, indicating neutrality with no clear bias.
Currently, the MACD remains below zero, indicating that the bearish pressure has decreased but has not disappeared.
If the rally continues, the first major resistance is at the 50-day EMA of $0.190. A definite break above this level will reveal upper resistances at $0.196 (200-day EMA) and $0.218.
A sustained move above $0.200 would encourage the case to recover significantly.
However, if the trend resumes, the bulls may need to immediately defend the $0.187 support level.
Failure to defend against this support could see XLM retesting the lows at $0.177 and $0.142 in the near future.
XLM is showing encouraging signs of recovery as derivatives activity tightens and currency prices remain positive.
However, XLM continues to face heavy selling pressure from market participants.
