Stellar’s Bullish Setup Holds—But Gains Could Stall Below $0.47

Stellar’s native token, XLM, has been quietly climbing over the past week, rising 10% in seven days and 3% in the last 24 hours. While the price has already broken out of a bullish formation on the daily chart, the move has yet to ignite the type of explosive rally some traders expected.

Instead, the market is seeing a cautious standoff between strong on-chain selling potential and steady, but not overwhelming, buying pressure.

Exchange Balances Hit Record Highs

One key reason behind Stellar’s subdued momentum lies in its supply dynamics. On-chain data shows that exchange balances — the amount of XLM held in exchange wallets — have reached an all-time high of over 1.03 billion XLM. At current prices, that’s worth approximately $469.7 million.

Historically, high exchange balances suggest an elevated risk of selling pressure. Tokens sitting on exchanges can be quickly sold into rallies, creating a “ceiling effect” where upward moves meet heavy resistance. This supply overhang means that even after a bullish technical breakout, XLM faces difficulty sustaining a strong uptrend.

The July–August period, which averaged around 1.02 billion XLM in exchange balances, already marked one of the highest points in the token’s history. The latest increase adds further weight to the supply side of the market.

Money Flow Index Shows Steady Demand

While the supply picture is clearly bearish, demand for XLM has not disappeared. The Money Flow Index (MFI), a momentum oscillator that incorporates both price and volume data, is currently sitting at 51.32. Readings above 50 indicate net capital inflows, suggesting that more money is flowing into the asset than out.

Importantly, the MFI has recently turned higher after avoiding a retest of its July lows near 29. This uptick signals that buying activity is still present, helping XLM maintain its price range despite the record supply on exchanges.

In short, the market is in a tug-of-war: sellers have the liquidity to cap rallies, but buyers are active enough to prevent a significant breakdown.

4-Hour Chart Shows Bullish Structure but Weakening Momentum

Looking at the shorter-term technical picture, the 4-hour chart reveals XLM trading inside an ascending triangle pattern — a bullish continuation structure. The pattern’s horizontal resistance is at $0.47, with interim resistance near $0.46. Key support sits at $0.44, with a deeper risk level at $0.43.

However, momentum indicators are flashing caution. The Relative Strength Index (RSI) has formed a lower high even as price action set a higher high — a divergence that often points to short-term exhaustion. This suggests that while the bullish pattern remains intact, the strength behind the move is fading.

Key Levels to Watch

• Resistance Zone: $0.46 to $0.47 Breaking above $0.47 would mark a confirmed pattern breakout and could trigger a wave of short liquidations, adding fuel to the rally. According to Coinglass data, a cluster of short positions could be forced to close if XLM pushes past this threshold, potentially creating a cascading effect higher.

• Support Levels: $0.44 and $0.43 A drop below $0.44 would put pressure on the bullish structure, while a break under $0.43 could trigger long-side liquidations and shift momentum decisively in favor of sellers.

Market Outlook

For now, Stellar is in a holding pattern. The bullish technical setup provides a reason for optimism, but the combination of record-high exchange balances and weakening short-term momentum means gains could remain limited unless a clear catalyst emerges.

A decisive breakout above $0.47 could shift sentiment rapidly, especially if it coincides with a liquidation-driven rally. On the other hand, a failure to hold above $0.44 — and particularly $0.43 — would increase the risk of a deeper correction.

Conclusion

Stellar’s price action shows that even in a bullish technical environment, heavy supply can keep rallies in check. Record exchange balances present a clear challenge for XLM, while steady but moderate buying pressure prevents a breakdown. The coming days may prove pivotal: a breakout over $0.47 could unleash significant upside, but a slip under $0.43 would put the current bullish setup in jeopardy.

Post Views: 75