TL;DR
XLM is trading higher on Thursday after defending key support levels earlier this week.
Rising Open Interest (OI) and positive funding rates suggest fresh capital is flowing into both markets.
XLM remains below major resistance levels despite showing signs that bearish momentum is fading.
Stellar’s XLM continues its recovery on Thursday, supported by improving derivatives metrics and stabilizing technical indicators after the cryptocurrency defended key support levels earlier in the week.
Open Interest climbs as traders return
Derivatives data points to renewed confidence among market participants. According to CoinGlass, XLM Open Interest climbed from $153 million on Monday to around $195 million, up 25% in the last 24 hours.
The simultaneous rise in prices and Open Interest suggests fresh capital is entering the market rather than traders simply closing positions. This typically signals strengthening conviction behind the current recovery.
Market sentiment has also improved across perpetual futures markets. XLM recorded positive funding rates after turning positive on Tuesday.
Positive funding rates indicate that traders holding long positions are paying a premium to maintain their exposure, reflecting growing bullish sentiment.
While derivatives indicators have strengthened, on-chain metrics paint a mixed picture. CryptoQuant indicates that XLM continues to experience selling-side dominance across both spot and derivatives markets, suggesting larger traders remain hesitant despite the recent rebound.
This imbalance could limit the pace of any sustained upside move.
XLM technical analysis: Recovery faces multiple technical barriers
Stellar traded around $0.189 on Thursday after bouncing from support near $0.177.
However, XLM continues to trade below the 50-day EMA at $0.190 and the 200-day EMA at $0.196
The token is currently hovering just above its 100-day EMA at $0.187, providing immediate support.
Momentum indicators suggest buyers are gradually returning but remain cautious. The RSI is near 49, reflecting neutral momentum without a clear bullish bias.
Meanwhile, the MACD remains slightly below zero, indicating bearish pressure has weakened but has not fully disappeared.
If the rally persists, the first major resistance lies at the 50-day EMA of $0.190. A decisive break above this level will expose higher hurdles at $0.196 (200-day EMA) and $0.218.
A sustained move above $0.200 would strengthen the case for a broader recovery.
However, if the bearish trend resumes, the bulls would need to instantly defend the $0.187 support level.
Failure to defend this support could see XLM retest lower demand zones at $0.177 and $0.142 in the near term.
XLM is showing encouraging signs of recovery as derivatives activity strengthens and funding rates turn positive.
However, XLM continues to face heavier selling pressure from larger market participants.
