![Stellar [XLM] hits a critical wall at alt=](https://ambcrypto.com/wp-content/uploads/2026/01/Kelvin-2026-01-06T201708.410-1000x600.webp "Stellar [XLM] hits a critical wall at alt=")
Stellar price action is starting to show early signs of renewed momentum after spending months trapped inside a tight flag consolidation.
At the time of writing, the token was up 7%, bringing the price action closer to the upper boundary of the former flag channel and reigniting bullish expectations among investors.
While the broader structure remains intact for now, the recent bullish movement hints at increasing buyer activity and dominance at current levels.
The key supply zone is seen at $0.261
At the heart of XLM’s short-term structure lies a familiar hurdle. The token is now testing the $0.261 supply zone, a level that has repeatedly capped bullish attempts in recent months.
Historically, this price level caused several rejection movements and the possibility of the situation repeating itself can be excluded.
However, a break above $0.261 would not only nullify the short-term supply threat, but could also predict a short-term trend reversal, making it possible to break out of the consolidation phase.
Source: TradingView
Changes in market bias
Stellar derivatives data adds weight to the bullish narrative. At current prices, long positions are almost triple short positions.
In fact, at press time, the Long/Short ratio stood at 2.769, indicating significant dominance by buyers as the position distribution tilts in favor of the bulls.
Most XLM investors and traders are betting on further price rises. The growing confidence resulting from the imbalance could prolong the current momentum, even more so if resistance subsides.
However, this positioning also increases the risks. If the price stalls at the resistance, the market could see increased volatility as leveraged traders adjust.
Source: Coinalyze
Possible continuation of the momentum?
To further support the breakout scenario, CoinGlass liquidity data revealed notable clusters lying above the current trading range.
The liquidity pool of 304.15K at around 0.2683 affirmed the bullish bias as traders logically target areas with higher concentration of orders and stops.
Source: CoinGlass
Taken together, the increasing bullish positioning along with proximity to key resistance and overall liquidity suggest that XLM could be on a further bull run.
A decisive move above the $0.261 resistance will be key in determining whether token prices will rise further to mitigate previous liquidity pools.
Final thoughts
- XLM is testing a critical supply zone of $0.261 after a 7% daily rise.
- Liquidity pools above current price levels suggest that a breakout could trigger a new bull run if resistance does not hold.
