TL;DR
- XLM is trading higher on Thursday after defending key support levels earlier this week.
- High open interest (OI) and positive funding rates indicate an influx of new capital into both markets.
- XLM remains below key resistance levels although there are signs that the bearish momentum is fading.
Stellar’s XLM continues its rebound on Thursday, supported by improving derivatives metrics and stabilizing technical indicators after the cryptocurrency defended key support levels earlier in the week.
Open interest rises as traders return
Derivatives data indicates renewed confidence among market participants. according to Queen GlassXLM’s open interest rose from $153 million on Monday to about $195 million, up 25% in the past 24 hours.
A simultaneous rise in prices and open interest indicates new capital entering the market rather than traders simply closing their positions. This usually indicates strengthening conviction behind the current recovery.
Market sentiment also improved across the perpetual futures markets. XLM recorded positive funding rates after turning positive on Tuesday.
Positive funding rates indicate that traders holding long positions are paying a premium to maintain their exposure, reflecting growing bullish sentiment.
While derivatives indices strengthened, on-chain metrics paint a mixed picture. CryptoQuant notes that XLM continues to suffer from sell-side dominance in both the spot and derivatives markets, suggesting that large traders remain hesitant despite the recent rebound.
This imbalance may limit the pace of any sustained upward movement.
XLM Technical Analysis: The recovery faces multiple technical hurdles
Stellar coin traded at around $0.189 on Thursday after bouncing from support near $0.177.
However, XLM continues to trade below the 50-day EMA at $0.190 and the 200-day EMA at $0.196.
The token is currently hovering above its 100-day moving average at $0.187, providing immediate support.
Momentum indicators indicate that buyers are gradually returning but are still cautious. The RSI is near 49, reflecting neutral momentum with no clear upward bias.
Meanwhile, the MACD is still just below zero, indicating that the bearish pressure has weakened but not completely disappeared.
If the rally continues, the first major resistance lies at the 50-day EMA at $0.190. A decisive break above this level will expose higher hurdles at $0.196 (200-day EMA) and $0.218.
A sustained move above $0.200 would strengthen the case for a broader recovery.
However, if the downtrend resumes, the bulls will need to immediately defend the $0.187 support level.
Failure to defend this support could see XLM retest the lower demand areas at $0.177 and $0.142 in the near term.
XLM is showing encouraging signs of recovery as derivatives activity strengthens and funding rates turn positive.
However, XLM continues to face greater selling pressure from larger market participants.
