XLM Under Pressure : Decoding the Key Moment
Since its recent peak at $0.3344 a week ago, Stellar (XLM) has been moving in a downward channel. Over the past week, XLM has dropped to a local high of $0.276. Currently, at the time of writing this article, XLM was trading at $0.2799, marking a 4.26% decrease in 24 hours. On the weekly charts, the altcoin was down by 11.1%.
The significant drop of XLM last week sparked discussions among crypto analysts. Ali Martinez, one of them, envisions a possible drop to $0.23 if Stellar fails to maintain $0.27 as a support.
In his analysis, Martinez noted that Stellar could face a strong price correction as the bearish momentum strengthens. According to him, XLM must hold the $0.27 level to avoid future losses. In case of a break below this level, the altcoin will find a next support around $0.23.
Are Investors Remaining Cautious ?
Investors are pulling out of the market as the bearish pressure mounts. Stellar’s Open Interest aggregated by exchanges has dropped for 6 consecutive days. Currently, the altcoin’s Open Interest stood at $38 million, down from $49 million.
Furthermore, the aggregated funding rate for the altcoin has once again dropped into negative territory. This decline indicates that even those opening positions as Open Interest decreases have mainly bet on the downside. Thus, the majority of market participants are betting on price decreases, indicating strong bearish sentiments.
Stellar : A Decisive Technical Turning Point Ahead ?
Stellar is facing strong downward pressure with sellers dominating the market. If the current trend continues, XLM will record further losses. Therefore, if sellers continue to dominate the market, the selling pressure will further drive down the price.
In conclusion, a pullback of the altcoin prices from its current levels would see it find support around $0.263. If this level fails to hold, a new drop will send XLM to $0.252. Short-term, a drop to $0.23 as predicted by Martinez is unlikely unless a strong sustained decline occurs. For a trend reversal, XLM must stay above $0.27. Stay informed about all crypto news by subscribing to our daily newsletter.
