Stellar Faces Downward Pressure as Analysts Highlight Risks of Decline to $0.26

• Stellar (XLM) is facing significant downward pressure, highlighted by the formation of a death cross that could push prices down to $0.26.

• The altcoin has dropped 1.67% daily, with a notable 6.6% decrease in Open Interest, reflecting reduced trading activity.

• “If bulls fail to push the altcoin above the $0.29 level, further losses are likely,” noted analyst Ali Martinez from COINOTAG.

This article analyzes the recent bearish trends affecting Stellar (XLM), including critical price movements and market sentiment, all within a concise overview.

Stellar (XLM) Faces Bearish Trends Amid Market Uncertainty

The recent performance of Stellar (XLM) illustrates a concerning trend for investors. After reaching a local high of $0.33 two weeks ago, the coin has retraced to $0.28, indicating a downward trajectory. The most recent 1.67% daily decrease arrives in conjunction with declining activity in the derivatives market, which has seen trading volume plunge by 62.7% to just $97 million.

Market Dynamics and Structural Weakness Indicate Risk

This steep decline in trading volume and Open Interest, which is now at a low of $160 million, signifies a shift in market sentiment. As participation from both speculative traders and long-term investors diminishes, the bearish outlook becomes clearer. Structural weaknesses are evident, aligning with historical patterns seen in bearish markets.

Source: Ali on X

Ali Martinez has emphasized the severity of this bearish phase, noting that XLM may have exited its ascending channel — a classic indicator of trend exhaustion. This implies that further downside moves could be imminent unless significant market changes occur.

Source: Coinalyze

Analysis of the spot market reflects a continued bearish sentiment, with seller dominance leading to a negative Delta of 313.2k. XLM sellers offloaded 21.95 million tokens, while only 21.64 million were purchased by buyers. This trend emphasizes the ongoing selling pressure ramping up on the asset.

Technical Indicators Signal a Broader Sell-Off

The emergence of the ‘death cross’ on XLM’s daily chart is a significant technical indicator, with the 9-day DSMA slipping below the 21-day DSMA. This configuration typically foreshadows further declines, as historically, it has acted as a reliable short-term bearish signal. Currently, XLM is trading below both moving averages, and unless a reversal occurs, the momentum is likely to trend downward.

Source: TradingView

As the market stands, any potential rebound for Stellar would require a daily close above $0.29. Without such a movement, the risk remains high for further declines towards the next support level around $0.2653.

Conclusion

In summary, the current market dynamics for Stellar (XLM) indicate a strong bearish trend, fueled by declining volumes and market participation. Investors should exercise caution and closely monitor price movements, as failure to sustain levels above $0.29 may lead to deeper losses in the near future.