Cryptocurrency investors should brace themselves: the altcoin Stellar (XLM) is under mounting pressure. According to recent analysis, the digital asset has broken below a descending parallel channel and is now in peril of sliding by up to 15 % if demand continues to dry up.
Weakening Retail Interest and Contract Open Interest Decline
Demand from retail traders is showing clear signs of weakening. Data from CoinGlass indicates that the open interest (OI) in XLM futures — representing the total nominal value of unsettled contracts — has fallen steadily to around USD 118.98 million, the lowest level since mid-April.
This decline in OI suggests that leveraged traders are either exiting their positions or being forced out by liquidations, which in turn tends to amplify downward price momentum for XLM.
Technical Indicators Point to a Bearish Outlook
In the technical arena, several red flags are flashing:
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XLM recently broke down from a descending parallel channel on its daily chart after two consecutive sessions of red candles.
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A so-called “death cross” has formed: the 50-day Exponential Moving Average (EMA) has fallen below the 200-day EMA, a classic signal of a potential long-term downtrend.
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On momentum indicators:
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The Relative Strength Index (RSI) on the daily timeframe is hovering near 30, indicating strong selling pressure.
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The Moving Average Convergence Divergence (MACD) continues to trade below its signal line, reinforcing the bearish momentum.
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Veteran market analyst Peter Brandt has flagged the situation, pointing out that the ADX (Average Directional Index) has climbed to 37 — signaling a strengthening trend, likely to the downside.
Price Outlook: A Move Toward USD 0.22 or a Reversal to USD 0.30?
At the time of writing, XLM is trading around USD 0.27, having seen a modest ~1 % uptick in the day.
With the channel breakdown and technical triggers in place, one target cited is USD 0.22, a level that could serve as a major support zone if the breakdown deepens.
That said, there is a “but” — if XLM manages to gain enough momentum to break above its June 11 high near USD 0.2851, the altcoin could refocus on the psychological level of USD 0.30, bringing some relief to investors.
Key Takeaways for Investors
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The downturn in open interest suggests reduced speculative interest and a risk of capitulation among leveraged traders.
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The technical picture is bearish: death cross, RSI near oversold territory, MACD bearish, and ADX confirming a strong trend.
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While USD 0.22 is the immediate downside target, a bullish reversal scenario exists if XLM breaks above USD 0.2851 — but that appears to be the less likely path in the current setup.
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As always in crypto, risk is elevated: this is not a time for complacency.
Final Thoughts
In summary, Stellar (XLM) is navigating choppy waters. With retail demand fading and key technical signals aligning toward the downside, the coin appears vulnerable to a further drop of up to ~15 % from current levels. That said, markets are unpredictable, and a sharp reprieve remains possible if sentiment shifts and technical resistance is overcome.
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