Stellar (XLM) is showing mild signs of recovery following a two-day decline toward the weekend. At the time of writing, XLM is up 1.01% in the last 24 hours, trading at $0.27.
While XLM’s slight rebound is a positive signal, its sustainability remains uncertain. Stellar started declining since reaching multi-year highs of $0.638 in November 2024. Bulls attempted to revive the uptrend in January this year but met resistance at $0.51, and Stellar has since declined to trade below the daily SMA 50, now at $0.297.
March saw lackluster trading for Stellar, with its price action locked within a range between its daily SMA 50 and 200, currently at $0.297 and $0.28. Although XLM fell below the range in mid-March, the price quickly returned to it.
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Fast forward to the present, crypto prices tumbled on Friday following a hotter-than-expected inflation report; Stellar likewise fell, reaching lows of $0.269 in the session. The drop caused XLM to trade below the daily SMA 200 once again. The sell-off continued on Saturday with XLM reaching lows of $0.261 before slightly rebounding.
Will it last?
In the coming sessions, investors and analysts will be looking to see if this price rebound is the start of a recovery or a dead cat bounce in which the price briefly recovers before heading down.
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In the short term, market analysts expect the crypto market to be largely impacted by macroeconomic factors, given that there is no crypto-specific trigger to drive price growth. That said, broader crypto market movements might play a role in determining XLM’s direction. Increased buying pressure in the market could cement XLM’s price recovery.
Also, how the XLM price behaves near key support and resistance levels will be closely watched. In this context, a return above the daily SMA 200 at $0.28 would restore XLM to its previous range and prevent further declines. XLM could consolidate a little while longer above here before making its major move.
The daily SMA 50 at $0.297 remains the short-term hurdle, with targets of $0.375 and $0.514 if breached.
