Stellar at Crucial Support - Can $7.65 Billion in Spot Buys Ignite XLM’s Rally?

Stellar's XLM is hovering at a significant support level, with bullish indicators hinting at a possible upturn toward $0.52. Despite current uncertainties reflected by the Money Flow Index, recent spot buying activity could set the stage for a potential rally.

Key Takeaways

Consistent spot buying and optimistic technical indicators could propel XLM towards $0.52.
The Money Flow Index indicates bearish sentiment persists, despite increasing capital inflow.
In the past 24 hours, Stellar [XLM] has shown slight price stability even as the overall market trends upward.
This stagnant performance is notable, especially with Stellar's robust third-quarter outlook and a 37% increase in developer activity, making it the third most-used blockchain.
Investors are actively participating; here's a look ahead at potential developments.

Stellar [XLM] at make-or-break support — Will spot buying trigger a rebound?

XLM Approaches Key Support Level

XLM has reached a pivotal support area within a typical bullish descending channel. Ideally, a price rally is anticipated from this position. However, trading volume remains low at only 17%, with $451 million recorded at the time of writing.

XLM price chart Source: TradingView

If XLM can move up from this support zone, it might reach the upper resistance channel, potentially breaking out toward the $0.52 mark, which was its previous high. On the flip side, if this support fails, XLM may decline, risking the loss of the 133% gain observed between July 5 and July 18.

Accumulation Underway but with Caution

Technical measures, such as the Accumulation/Distribution (A/D) line, indicate that investors are gradually accumulating the asset. This trend is typically seen when the A/D shows positive volume—currently standing at 21.58 billion at the time of this report.

Despite the A/D being below previous highs, it suggests that buying activity is prevailing in the market.

XLM technical indicator chart. Source: TradingView

The Money Flow Index (MFI) assists in illustrating this trend further. The MFI tracks liquidity movement in the market and has been trending upward, indicating increasing capital flow. However, it remains within the bearish range of 30 to 50. This suggests that even though accumulation is ongoing and money is coming back into XLM, investors are still exercising caution.

Spot Buying May Enhance Momentum

Spot investors are also fostering acquisition of the asset. Data from CoinGlass’s Spot Exchange NetFlow, which monitors market movements, reveals that investors have engaged in a four-day buying streak. Each of these days ended with a higher volume of purchases than sales, accounting for a total of $7.65 billion in market buys.

XLM spot exchange netflow. Source: CoinGlass

This ongoing spot buying, combined with stronger technical indicators, supports the possibility that XLM could rebound from its current support zone and reach a new short-term high.