- XLM price bounces off support slightly beneath $0.2 as bulls look toward $0.24.
- A V-shaped recovery could see Stellar sustain the uptrend, especially if the 50 SMA resistance is overcome.
Stellar seems to be flying the bull flag high above the cryptocurrency horizon in the wake of the widespread declines earlier on Monday and Tuesday. Key support areas managed to hold most crypto assets, explaining the rampant green colour on the day. As the European session takes root, the cross-border money transfer token is trading at $0.215.
CoinGecko shows that XLM is up 6.2% in 24 hours and has attracted a trading volume of $364 million. The token holds the 20th position with a market cap of $5.2 billion. The competition for a top 20 spot seems to be intensifying, with cUSDC likely to displace Stellar in the coming sessions.
XLM Price V-shape Recovery In Progress
Support at $0.2 allowed bulls to regain balance and begin to push for recovery. Trading above a subtle hurdle at $0.205 boosted the price higher, closing the gap to $0.22. This formed a V-shaped recovery that is likely to sustain Stellar to $0.24, a barrier highlighted by the 200 Simple Moving Average (SMA).
At the time of writing, Stellar’s uptrend appears to have taken a pit stop under $0.22, a hurdle reinforced by the 50 SMA on the two-hour chart. The continuous recovery from the formidable buyer congestion zone has been reflected by the Relative Strength Index (RSI) based on the indicators rebound from the oversold region to above the midline.
XLM/USD Two-hour Chart
It is worth mentioning that a V-shaped recovery occurs after a massive downswing in an asset’s price, which after securing firm support, results in a sharp yet sustainable recovery. However, Stellar must bring down the resistance at the 50 SMA to validate the rest of the journey to the 200 SMA.
Looking At The Other Side Of The Fence
Santiment, a behavioural analytics platform, shows that XLM experienced a spike in social media-related mentions during the dip to $0.2 and the initial recovery stages. However, the prevailing data records another drop in the same metric.
Stellar Social Volume Model
Note that a spike in the social volume often shows that the token’s uptrend is supported. Moreover, on-chain interactions tend to shoot up as users speculate a rally. However, a sudden fall in the mentions is a bearish signal. It shows that bulls are deprived of the momentum to sustain the uptrend as investors sell following the spike in price.