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Stellar (XLM) has increased in price by a massive 50% in the past 24 hours, becoming the best performing asset during this period. This increase is tied to Grayscale Investments LLC’s recent 10-K filing for Grayscale Stellar Lumens Trust.
At the moment, the altcoin is trading at $0.45, its highest price since 2021. However, the daily chart suggests a possible short-term decline. Here are the details.
Grayscale Stellar Lumens Trust Surges in Net Assets
On Friday, Grayscale Investments LLC filed the paperwork 10-K for Grayscale Stellar Lumens Trust (XLM) for the fiscal year ending September 30, 2024. This report recorded a 10% increase in total net assets for the fiscal year under review.
The 10-K filing is the annual report that publicly traded companies in the United States must file with the Securities and Exchange Commission (SEC). This report provides an overview of the company’s financial performance. It includes 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 provides investment opportunities in XLM, has faced losses. This is due to the reduction in the value of the Token during the review period and the fees paid to the fund’s sponsors. However, these losses were offset by the increase of 34,875,230 XLM Tokens valued at $3,923 added to the fund. This results in a net increase in the fund’s total assets.
XLM Reacts to the News
The positive feeling surrounding this filing has led to an increase in the value of XLM. In the past 24 hours, the Token price has jumped 58%, becoming the highest interest rate in the market. As of now, the altcoin trades at $0.45, a price last recorded in November 2021.
However, reading from the daily chart suggests that this rally may not continue as XLM is already overbought among market participants. For example, the Relative Strength Index (RSI) has reached an all-time high of 92.54 at the moment.
RSI measures overbought conditions of assets in the market. It ranges from 0 to 100, with values ​​above 70 indicating that the asset is overbought and in need of a correction. Conversely, values ​​below 30 indicate the asset is oversold and a recovery could be seen. XLM’s RSI reading of 92.54 suggests that it is severely overbought and is at risk of a correction.
Furthermore, the price of XLM trades above the top line of the Bollinger Bands indicator, confirming the probability of a price correction.
The Bollinger Bands indicator measures market volatility and identifies potential buy and sell signals. It consists of three main components: middle band, upper band and lower band.
When the price trades above the upper band, it shows that the asset is overbought. This means the asset price has risen significantly above its average price and is at risk of a correction in the short term.
XLM Price Prediction: Token May Lose Recent Gains
Once buyer exhaustion occurs, XLM’s price risks paring recent gains. According to the Fibonacci Retracement tool, if this happens, its target price will be the support formed at $0.35. If the bulls fail to defend this level, the Token price could fall further to $0.23.
Conversely, if buying pressure increases, the XLM Token price will continue its uptrend and attempt to surpass $0.52, a peak it last reached in May 2021.
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