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After a continuous price decline, the cryptocurrency market seems to be recovering, and Stellar ($XLM) appears to be regaining its bullish momentum. In the past three days, $XLM has experienced a price decline of over 18% and has also broken through its crucial support level of $0.403.
$XLM Bulls Back
However, with today’s upside momentum, $XLM has returned to the support level and is poised for further gains. The potential reason for this price recovery across the crypto market, including $XLM, is the upcoming inauguration of President-elect Donald Trump, scheduled for January 20, 2025.
With this potential price recovery, the $XLM daily chart has formed an ideal setup for traders looking to go long, with a perfect risk-to-reward ratio.
$XLM Technical Analysis and Upcoming Levels
According to $XLM’s daily chart, traders can see an attractive 1:5.6 risk-to-reward ratio, with a stop loss at $0.38 and a target at the $0.60 mark.
If we delve deeper into the analysis, expert technical analysis suggests that $XLM is forming a bullish inverted head-and-shoulders price action pattern on the daily time frame.
Based on the recent price action, if $XLM closes its daily candle above the $0.415 mark, there is a strong possibility it could soar significantly and complete the speculated price action pattern.
Traders Over-Leveraged Positions
Looking at this bullish outlook, traders seem to be building long positions, as revealed by the on-chain analytics firm Coinglass.
According to the data, the major liquidation level on the lower side is $0.388, where traders have held significant long positions worth $7.47 million. However, $0.422 is another major liquidation area where short sellers have built over $2.09 million worth of short positions.
These levels are areas where traders are over-leveraged and have the potential to be liquidated if the price shifts to either level.
Current Price Momentum
Currently, $XLM is trading near $0.418 and has witnessed a price surge of over 4.5% in upside momentum. However, during the same period, its trading volume has also increased, indicating heightened participation from traders and investors.