Stellar (XLM) is back in the spotlight after surging to $0.515, matching January's highs. However, signs of a potential pullback are emerging.
Price Hits January Highs
XLM’s rapid growth has brought the altcoin face-to-face with a critical resistance level at $0.515. While Stellar's broader structure remains bullish, its failure to decisively break above this level raises caution among traders.
On the 4-hour chart, a bearish divergence has emerged, indicating overextended market conditions. This divergence, where price continues rising but momentum indicators start declining, often signals a potential reversal or cooling-off period.
Overall Picture Remains Bullish
Despite short-term headwinds, Stellar’s weekly chart paints a clearly bullish narrative. Since the first structural break in May, the altcoin has posted a series of higher highs and higher lows. The recent move from $0.216 to $0.515 has only solidified this uptrend.
Even if XLM retraces from current levels, technical analysts suggest the bullish structure will hold firm as long as prices remain above $0.28. This makes any correction potentially healthy rather than bearish.
Next Support Level at $0.364
Using Fibonacci retracement levels, the 50% retracement of the latest rally aligns perfectly with February 2025 high at $0.364, making it the next logical support and demand zone. Traders eyeing entry points might consider this level ideal for buying if the price cools further.
Supporting this outlook, the Accumulation/Distribution (A/D) indicator has reached new highs, reflecting significant recent buying interest. Likewise, the Chaikin Money Flow (CMF) remains well above +0.05, confirming strong capital inflows.
Stellar's rally to $0.515 represents a strong show of bullish momentum, but a cooling-off phase may be imminent due to technical overextension. A retracement toward $0.364 could offer a healthy reset before any move toward new highs.
