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XLM deeply overbought amid these interesting developments

2min Read

XLM’s current price level reveals that it is deeply overbought according to the RSI. As such, we will likely witness some profit-taking.

XLM deeply overbought amid these interesting developments

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  • XLM enjoys 40% upside after finding favor with the bulls.
  • Stellar’s long-term growth plans offer a ray of hope against the potential downside.

The Stellar blockchain has been living in the shadows of its bigger brothers such as Bitcoin and Ethereum. Despite that, its native crypto XLM has been raising the heat for the last two weeks as the bulls made a comeback.


Is your portfolio green? Check out the XLM Profit Calculator


Let’s break down XLM’s recent impressive performance. It bottomed out at $0.075 in mid-June after a bearish phase that started in March. The recent rally pushed the price up by as much as 40%, making XLM one of the best performing coins among the top cryptos by marketcap. It exchanged hands at $0.10 at the time of writing.

XLM price action

Source: TradingView

A closer look at XLM’s current price level reveals that it was deeply overbought according to the RSI. As such, we will likely witness some profit-taking, hence more sell pressure can be expected within the next few days. It already delivered some sell pressure within the last 24 hours.

Is there more sell pressure to come?

Trader psychology may offer insights into what to expect. If whales are looking to take profit soon, they will do so when retail participation soars so they can secure enough exit liquidity. Interestingly, Stellar’s social dominance metric just registered a large spike to 6-month highs in the last 24 hours.

XLM weighted sentiment and social dominance

Source: Santiment

XLM’s weighted sentiment has also been on the rise for the last 2 weeks. On-chain data may already indicate that retail money is now FOMO-ing in. A perfect example of this is the massive volume spike that XLM registered in the last 24 hours.

XLM volume

Source: Santiment

These observations confirm more signs of retail influx which may provide the aforementioned liquidity. Bearish expectations also align with the overbought price characteristics. However, it does not necessarily rule out a bit more upside that may be driven by retail demand, before finally experiencing bullish exhaustion.

Market factors should also be considered. The level of sell pressure may depend on whether the overall cryptocurrency market will be experiencing sell pressure after the latest rally.  But what about the long-term outlook?


How many are 1,10,100 XLMs worth today


Stellar has been working towards securing its position in the payments industry. Some of its recent announcements underscore partnerships aimed at extending its influence in the decentralized global payments industry.

The current short-term outlook might be bearish on account of profit-taking. Nevertheless, the developments around global payments may offer some confidence to investors regarding XLM’s long-term outlook.

 

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Michael is a full-time journalist at AMBCrypto. He has 5 years of experience in finance and forex and more than two years as a writer in the crypto and blockchain segments. Michael's writing at AMBCrypto is primarily focused on cryptocurrency market news and technical analysis. His interests include motorcycles and exotic cars.
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