Stellar (XLM) edged higher by more than seven percent on Monday, extending its rebound within a descending channel pattern. Data from derivatives markets point to a growing risk-on sentiment among traders, reflecting renewed confidence in the broader cryptocurrency sector. While technical indicators suggest a bullish shift in trend momentum, multiple resistance levels remain overhead.
Optimism Among Traders
Interest in XLM has surged as the market opens the week on a positive note, buoyed in part by optimism surrounding a potential resolution to the U.S. government shutdown. CoinGlass reports that XLM futures Open Interest (OI) has risen to $130.16 million, marking an 11.68% increase over the past 24 hours. This growth indicates that traders are positioning for further upside in the token.
The long-to-short ratio for XLM, a measure of outstanding long positions relative to short positions, currently stands at 1.0597. A ratio above one suggests that bullish sentiment is prevailing, as traders increasingly favor long positions over short bets.
Technical Outlook: Recovering Within a Descending Channel
At press time, Stellar trades near $0.3000, rebounding within the larger downward channel on the daily chart. The token remains below key Exponential Moving Averages (EMAs), including the 50-day at $0.3265, the 100-day at $0.3417, and the 200-day at $0.3361. A successful push above these averages could open the way toward the descending channel’s overhead trendline around $0.3700.
Daily technical indicators signal a resurgence in bullish momentum. The Moving Average Convergence Divergence (MACD) has crossed above its signal line, while the Relative Strength Index (RSI) has climbed to 49, indicating reduced selling pressure. However, a recent Death Cross pattern—formed when the 50-day EMA fell below the 200-day EMA on November 3—remains a reminder of the prevailing bearish backdrop.
Potential Risks
If Stellar fails to sustain its short-term recovery, a downward move could target last week’s low at $0.2520. A close below this level would confirm a bearish breakout from the descending channel, signaling that sellers may regain control.
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