XLM defends major moving averages as buying pressure builds

Key takeaways

• Stellar (XLM) continues to hold above key moving average support levels, preserving its overall bullish outlook.
• The asset’s long-to-short ratio climbed to 1.15, nearing a one-month peak.
• Overhead resistance is active at $0.20, with subsequent targets identified at $0.218 and $0.237.

Stellar (XLM) maintained its position above critical support levels on Tuesday, keeping the door open for further upward movement despite mixed momentum indicators.

Activity in the derivatives market also points to growing bullish sentiment, as rising long-to-short ratios and positive funding rates indicate traders are increasingly positioning for a price increase.

Derivatives traders increase long positions

According to data from CoinGlass, XLM’s long-to-short ratio reached 1.15 on Tuesday, hovering close to its highest level in a month.

Because a ratio exceeding 1.0 indicates a dominance of long positions over shorts, this shift suggests derivatives market participants are anticipating further price gains.

This optimistic outlook is mirrored in funding rates, which turned positive on September 2 and subsequently climbed to 0.0147%.

A positive funding rate means buyers holding long positions pay fees to short sellers to keep their trades open. While this reflects strong bullish sentiment, excessively high rates can sometimes trigger long liquidations if the market suddenly reverses.

For now, the current metrics suggest a healthy, constructive market structure without pointing to overextended positioning.

XLM recovery extends above EMA support

On Tuesday, XLM was trading near $0.193, having successfully climbed above its primary exponential moving averages (EMAs).

The 50-day, 100-day, and 200-day EMAs are tightly clustered between approximately $0.179 and $0.188. This range now serves as a significant demand zone that could cushion the asset during brief pullbacks.

The Relative Strength Index (RSI) is hovering around 60, keeping it in bullish territory without entering overbought conditions.

Meanwhile, the MACD indicator remains slightly positive, with the MACD line sitting above the signal line and the histogram holding above zero. This setup points to steady upward momentum, though buyers have yet to spark a decisive breakout.

Looking ahead, XLM’s first major hurdle lies at the 61.8% Fibonacci retracement level around $0.200.

A decisive move past this psychological and technical milestone could pave the way for a test of the 50% retracement level near $0.218. Beyond that, the next resistance target is the 38.2% Fibonacci level at $0.237.

Surpassing these obstacles could clear a path toward the descending trendline and the 23.6% Fibonacci retracement level near $0.260.

Conversely, if the price drops, the 200-day EMA at $0.188 offers immediate support. Additional safety nets are provided by the 100-day and 50-day EMAs at $0.180 and $0.179, respectively.

Should selling pressure drag XLM below this cluster of moving averages, focus will shift to horizontal support at $0.177 and the 78.6% Fibonacci retracement level at $0.173.

Bulls must defend this region to keep the broader recovery trend intact. A breakdown below this zone could expose lower support levels at $0.142 and $0.139.

Ultimately, technical indicators and derivatives positioning point to potential upside for both XRP and XLM. However, confirmation of a sustained rally depends on XRP breaking past $1.90 and XLM establishing a solid foothold above $0.20.