Stellar Price Forecast: XLM recovery gains traction as bulls eye trendline breakout

Stellar (XLM) rises by 2%, trading above $0.155 as of writing on Tuesday after posting a modest rebound on the previous day. Despite the ongoing price recovery, mixed on-chain and derivatives data indicate traders remain cautious, suggesting indecision among XLM investors. On the technical side, XLM could gain further upside momentum if it breaks above its descending trendline.

Mixed on-chain and derivatives data signals indecision

Stellar on-chain data shows a positive outlook. Santiment’s Social Dominance index measures the share of XLM-related discussions across the cryptocurrency media. It has been trending upward since the end of February, reaching 0.029% on Tuesday, the highest level since February 4. This rise indicates growing market interest and strengthening sentiment among XLM investors.

Stellar’s CryptoQuant summary data shows a largely neutral outlook with early signs of bullishness. The presence of large whale orders in the market suggests a slightly optimistic outlook for XLM. In contrast, other key metrics across both spot and futures markets continue to signal overall indecision among traders.

On the derivatives market, XLM’s negative funding rates, alongside rising short bets, hint at a bearish outlook. CoinGlass’s OI-Weighted Funding Rate data shows that the number of traders betting that the price of Stellar will slide further is higher than those anticipating a price increase.

The metric turned negative on Friday and remained in negative territory at -0.006% on Tuesday, indicating that shorts are paying longs, signaling bearish sentiment toward XLM. In addition, the long-to-short ratio for Stellar reads 0.77 in the same period. This ratio, being below one, reflects bearish sentiment in the market, as more traders are betting on the asset’s price to fall.

This combination of slightly bullish on-chain with bearish derivatives metrics suggests indecision among XLM investors, which could limit the chances of a sustained recovery.

Stellar Price Forecast: XLM could extend its rally if it breaks above the descending trendline.

XLM price is trading above $0.155 as of writing on Tuesday. The near-term bias is neutral, with a bearish tilt, as price holds well below the 50-day and 100-day Exponential Moving Averages, clustered around $0.172–$0.200, keeping the broader downtrend intact despite recent stabilization. 

The Moving Average Convergence Divergence (MACD) indicator on the daily chart remains marginally positive but flat near the zero line, while the Relative Strength Index (RSI) at 46 shows momentum hovering below the midline, suggesting capped upside as the long-term descending trendline from $0.520 continues to act as overarching resistance even after the brief test around $0.160.

Initial resistance aligns near the recent swing area at $0.164–$0.165, reinforced by the 23.6% Fibonacci retracement at $0.164 measured from the January high of $0.255 to the February low of $0.136, with the 50-day EMA near $0.172 capping further gains ahead of the 38.2% retracement at $0.181. 

On the downside, immediate support stands at the recent lows around $0.150, followed by the $0.145 area, while a deeper slide would expose the prior base toward $0.1360, where buyers previously emerged to halt the decline.

(The technical analysis of this story was written with the help of an AI tool.)