Stellar Lumens (XLM) is displaying signs of a potential double bottom on the 15-minute chart, according to technical analyst Crypto With Gopal. The latest analysis highlights two consecutive rebounds around the $0.17 support zone, currently serving as an important level for traders monitoring short-term price movements.
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AAPLKey technicals signal hesitation for bullish breakout
XLM currently trades at $0.17, hovering just above the recent local low of $0.169. The Bollinger Bands indicate $0.17155 as a possible breakout barrier, where bullish sentiment could gain traction if surpassed. However, resistance from the SuperTrend indicator, which now shows a descending trend line, may pause any immediate upward momentum.
Technical analysis reveals that Stellar has recorded lower highs and lower lows, a pattern often associated with continued price softness. The SuperTrend, a metric that interprets the likely direction of the market, would shift to bullish if its green trend line crossed above the current XLM price, targeting $0.176 as the next resistance level.
Another notable indicator is the Chaikin Money Flow (CMF), which measures capital inflow and outflow in an asset to gauge large investor sentiment. Currently, the CMF for XLM remains negative across multiple timeframes, with readings ranging from -0.11 on lower time charts to -0.31 on the monthly. This suggests that significant investors, often referred to as “whales,” are not accumulating XLM positions at the moment despite the double bottom.
Mini dictionary: SuperTrend — An indicator used in technical analysis to identify the direction of the prevailing trend and potential reversal points. Values typically change color to signal bullish or bearish conditions, assisting traders in spotting entry and exit opportunities.
XLM’s double bottom around $0.17 is being closely monitored, but negative CMF readings and SuperTrend resistance suggest that a decisive bullish move may require strong buying activity by large investors.
Derivatives activity and prospects for a short squeeze
The current mood is echoed in the derivatives markets, where Stellar’s futures contracts show a long-to-short ratio of 0.95. This indicates that for every 95 long positions, there are 100 short positions, suggesting that bearish bets slightly outnumber bullish ones.
Short positions incurred $4,570 in liquidations, whereas long position liquidations reached $48,100. These figures suggest that bullish traders had more unsettled downside bets during the latest volatility.
| Ratio | Short Liquidations | Long Liquidations |
|---|---|---|
| 0.95 (long:short) | $4,570 | $48,100 |
Despite the apparent hesitation, open interest (the total number of unsettled derivative contracts on XLM) has been steadily increasing. If Stellar’s price manages to rally and retest the $0.20 resistance following the potential double bottom reversal, this rise in open interest could fuel a short squeeze, forcing heavy short-sellers to cover their positions and possibly accelerating any upward move.
Should XLM decisively break above resistance levels and trigger a wave of short covering, the consequent rally could push the price towards $0.20.
Recently trending market narratives
The ongoing technical developments in Stellar echo broader trends in the cryptocurrency sector, where shifts in trading sentiment and capital inflow have been central themes. Current data reflects that while search interest in cryptocurrencies is declining, some assets, like XRP, are seeing rising ownership levels. Meanwhile, institutional moves, such as the tokenization of $311 billion in money market funds by BlackRock in Europe, continue to make headlines.
