Stellar at KEY support – Can $7.65B in spot buys spark XLM’s rally?

Key Takeaways

What suggests Stellar could rally from its current support zone? 

Consistent spot buying and bullish technical indicators point to a potential breakout toward $0.52.

Why are investors cautious despite signs of accumulation? 

The Money Flow Index remains in a bearish range, indicating lingering uncertainty despite rising capital inflow.

Stellar [XLM] has remained relatively stable over the past 24 hours, posting a slight uptick while the broader market continues to rally.

This stagnation is puzzling, coming amid a positive third-quarter outlook that positions Stellar as the third most-used blockchain, with developer activity up 37%.

However, users appear to be placing their bets—here’s what could play out next.

XLM hits major support

XLM has traded into a key support zone within a typical bullish descending channel it has been moving in.

Ideally, a rally is expected to form from this point. However, Trading Volume remained low at just 17%, with $451 million recorded at press time.

A move from this support zone could push XLM into the upper resistance channel, and stronger momentum could trigger a breakout toward $0.52, its previous high.

If the support level fails to provide stability, XLM could trade lower, potentially wiping out the 133% gain it recorded between the 5th and the 18th of July.

Accumulation but caution

Technical indicators like the Accumulation/Distribution (A/D) line reveal that investors are steadily accumulating the asset.

This pattern typically emerges when the A/D reflects positive volume, in this case, 21.58 billion at the time of writing.

Although the current A/D level is below previous chart highs, it still indicates that buying activity is leading the market.

The Money Flow Index (MFI) further illustrates this. The indicator tracks the inflow and outflow of liquidity in the market.

The MFI was trending upward, suggesting growing capital inflow. However, it remains within the indicator’s bearish range, between 30 and 50.

This shows that while accumulation is ongoing and capital is flowing back into XLM, investors remain cautious.

Spot buying could boost momentum

Spot investors are also accumulating the asset.

Data from CoinGlass’s Spot Exchange NetFlow, which tracks market activity, shows investors have been on a four-day buying spree.

Each of these four days ended with more buys than sells, totaling $7.65 billion in market purchases.

This consistent spot buying, combined with strengthening indicators, supports the possibility of XLM rallying from its current descending channel support and setting a new short-term high.