XLM Token Price May Experience a Correction
star The price of (XLM) has surged 50% in the past 24 hours, making it the best-performing asset during this period. This surge can be attributed to Grayscale Investments LLC’s recent 10-K filing for its Grayscale Stellar Lumens Trust.
At press time, the altcoin was trading at $0.45, its highest price point so far in 2021. However, its daily chart reading hints at a possible short-term decline. Here’s how.
Stellar Lumens Trust net assets surge
On Friday, Grayscale Investments LLC’s Grayscale Stellar Lumens Trust (XLM) filed its 10-K Filing For the fiscal year ending September 30, 2024. It noted that the trust’s overall net assets grew by 10% during the financial year under consideration.
The 10-K filing is the annual report that U.S. public companies must submit to the U.S. Securities and Exchange Commission (SEC). It provides an overview of a company’s financial performance. It includes the entity’s audited financial statements, business operations, risk factors, and management’s discussion and analysis.
According to the report, Grayscale Stellar Lumens Trust (XLM), an investment vehicle that offers investors exposure to XLM, faced losses. This is due to the depreciation of the token price over the period considered and the fees paid to the trust sponsors. However, these losses were offset by the 34,875,230 XLM tokens (valued at $3,923) that were added to the trust. This resulted in a net increase in the trust’s total assets.
XLM reacts to the news
The positive sentiment surrounding the document resulted in The value of XLM skyrocketed. The coin’s price surged 58% in the past 24 hours, making it the market’s top gainer. As of this writing, the altcoin is trading at $0.45, with the price last observed in November 2021.
However, its daily chart shows that this rally may not last as XLM has become overbought among market participants. For example, its relative strength index (relative strength indexAt press time, the index hit an all-time high of 92.54.
RSI measures market conditions when an asset is oversold and overbought. It ranges from 0 to 100, with values above 70 indicating that the asset is overbought and in need of a correction. On the other hand, values below 30 indicate that the asset is oversold and may be due for a rebound. XLM’s RSI reading is 92.54 Indicating that it is severely overbought and at risk of a pullback.
Additionally, XLM price is trading above the upper limit of its Bollinger Bands indicator, confirming the possibility of a price correction.
Bollinger Bands indicator measures the market volatility and identify potential buy and sell signals. It consists of three main parts: the middle part bandupper band and lower band.
When the price is above the upper limit, it indicates that the asset is overbought. This means that the asset’s price has been significantly higher than its average price and is at risk of a correction in the short term.
XLM Price Prediction: Coin May Give Back Recent Gains
Once buyers are exhausted, XLM price is at risk of falling Some of its recent results. If this happens, its price target would be support formed at $0.35, according to its Fibonacci Retracement tool. If the bulls fail to hold this level, the coin’s price may drop further to $0.23.
On the other hand, if buying pressure intensifies, the XLM token price will continue its upward trend and attempt to break above $0.52, the high last touched in May 2021.
Disclaimer
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