Stellar snaps its 5-month slump – Is this the start of XLM’s long-awaited rally?

• XLM broke out of a multi-month bearish trend that started in November 2024, ending a 65% price decline.
• 65.37% of top XLM traders on Binance held long positions at press time.

Stellar [XLM] has finally broken out of its prolonged bearish trend, which began in November 2024. During this downtrend, the asset recorded a 65% price decline while forming a bearish channel pattern.

This breakout has not only paused XLM’s price decline but also opened the path for a massive upside rally. At press time, XLM traded near $0.284 after recording an 8.50% surge in the past 24 hours.

Moreover, trading volume jumped by 25% during the same period, reflecting heightened participation from both traders and investors.

Of course, the breakout and bullish price action likely fueled this renewed interest.

65% top traders go for long positions

While examining the on-chain metrics, it appears that traders and investors have been strongly betting on the bullish side.

At press time, the Binance XLMUSDT Long/Short ratio s ratio stood at 1.89, signaling strong bullish sentiment.

In fact, 65.37% of top traders on Binance held long positions, while only 34.63% held shorts.

Data further reveals that 65.37% of top XLM traders on Binance hold long positions, while 34.63% hold short positions.

Source: Coinglass

$6.37 million worth of bullish bets 

Coinglass’s XLM Exchange Liquidation Map reveals that traders have been heavily over-leveraged at $0.2558 on the lower side (support) and $0.285 on the upper side (resistance), both of which are on the verge of liquidation.

At these levels, traders have built $6.37 million worth of long positions near the support and $1.63 million worth of short positions near the resistance over the past seven days.

Source: Coinglass

Apart from this, Spot Inflow/Outflow data pointed to an outflow of $1.19 million worth of XLM from exchanges in the past 24 hours.

Such Outflow from exchanges indicates potential accumulation, which could lead to buying pressure and an upside rally.

Source: CoinGlass

These bullish metrics show traders’ and investors’ strong belief and confidence in the bullish side, and they seem to be supporting the bullish price action, which signals massive upside potential for the asset.

XLM technicals back the bullish narrative

According to AMBCrypto’s technical analysis, XLM appears bullish and is poised for a massive upside rally.

On the daily time frame, the asset has broken out of a descending channel pattern and closed a daily candle above the key level, confirming this breakout as successful.

Based on the recent price action and historical pattern, if the XLM price holds above $0.275, there is a strong possibility it could soar by 30% until the asset price reaches the $0.375 level in the future.

Source: TradingView

This bullish thesis will only hold if the XLM price remains above the $0.26 level, otherwise, it may fail.