- XLM’s value increased by 15% in the last week.
- However, short traders expected a price drop.
With a 15% increase in value, Stellar [XLM] closed the week as the cryptocurrency asset with the most gains over the past seven days, data from CoinMarketCap showed. At press time, the altcoin was trading at $0.13.
Source: CoinMarketCap
Read Stellars [XLM] Price prediction 2023-2024
The price jump occurred despite a statistically significant positive correlation with the leading coin Bitcoin [BTC]whose value only increased by 0.30% in the same period.
The spot market stands out
Last week’s price increase was primarily driven by renewed interest in XLM, resulting in a surge in new demand. Among traders in the token’s spot market, bulls regained control on September 4 and immediately initiated an 8% intraday price jump on that trading day.
As of this writing, the Moving Average Convergence/Divergence (MACD) indicator confirmed that bulls remain in control, with the MACD indicator positioned above the trendline. Since September 4th, the indicator has only shown green histogram bars.
Additionally, key momentum indicators signaled increased XLM accumulation among day traders. For example, the token’s Money Flow Index (MFI) was in an uptrend at 64.24, indicating that XLM accumulation was outpacing sell-offs.
Likewise, the %K line (blue) of the altcoin’s Stochastic RSI indicator was set at 100%, indicating that the volume of XLM accumulation exceeded the distribution. The Stochastic RSI indicator measures momentum and identifies overbought and oversold conditions in the market.
At press time, XLM was 100% overbought.
It is important to note that it is often difficult for buyers to support further price increases at these overbought levels. A revocation could therefore be imminent.
The slight decline in XLM’s Chaikin Money Flow (CMF) also lends some credibility to the above position. While the token’s CMF is still above its midline and positive at press time, it has been trending downward since September 6th.
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This indicated a decline in capital inflows into the XLM spot markets and signaled the start of profit-taking.
Source: XLM/USD, TradingView
Interestingly, futures markets have increasingly placed bets against the price of XLM. Data from Coinglass showed that funding rates on cryptocurrency exchanges have been increasingly negative since August 17th.
Source: Coinglass
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