XLM, the token of Stellar, has seen a significant 40% increase in its price in the first three days of January 2025. This quick rise in price has caught the attention of investors and traders in the crypto industry.
However, there are concerns as some investors are continuously selling off their XLM tokens on exchanges. On-chain analytics firm CoinGlass has reported that $36.36 million worth of XLM tokens have been moved to exchanges during this surge in price.
This influx of tokens onto exchanges suggests that long-term holders may be selling off their tokens to take profits. In the cryptocurrency world, this kind of activity often leads to selling pressure and a potential decline in price.
Despite this, XLM has reached a strong resistance level at $0.45. The last time it approached this level, it went through a period of consolidation. Similar signs are now appearing, causing worries among traders and investors about whether the price will consolidate further or decline.
Based on recent price action, there is a possibility of consolidation near this level as the price is stretched. Consolidation tends to attract new investors and traders, which could potentially strengthen XLM for a further rally.
According to technical analysis, if XLM breaks through the resistance level and closes a daily candle above $0.465, it could surge by 30% to reach its 52-week high. Otherwise, consolidation and price distribution are expected to continue.
Currently, XLM is trading near $0.45 and has seen a price increase of over 4.5% in the past 24 hours. However, trading volume has dropped by 40%, indicating less participation from traders and investors, possibly due to the approaching resistance level.
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