Key takeaways
- Stellar (XLM) remains under pressure despite a modest rebound after last week’s sharp market correction.
- Derivatives data points to a bearish bias, with long-to-short ratios below 1 and funding rates turning negative for the asset.
Stellar (XLM) continued to face selling pressure on Tuesday, even as it staged a modest recovery following a broad market pullback last week.
Weak derivatives positioning and mixed on-chain signals suggest recent gains are likely corrective and may not mark the start of a sustained bullish reversal.
Market metrics indicate traders remain skewed toward downside exposure, reinforcing a cautious outlook for the token.
Derivatives markets show growing bearish sentiment
Recent derivatives figures from CoinGlass show rising pessimism among traders. The long-to-short ratio for XLM fell to about 0.73 on Tuesday, near its lowest levels in more than a month.
A ratio below 1 means short positions outnumber longs, signaling expectations for further price declines.
That bearish tilt is also visible in funding rates. XLM’s funding rate turned negative on Monday and continued drifting lower into Tuesday.
Negative funding rates indicate short sellers are paying long holders, which typically reflects growing trader conviction in downside movement.
CryptoQuant’s market summary paints a mixed but slightly negative picture for XLM. The data point to heightened activity across spot and futures markets, with increased retail participation and buy-side concentration.
Although higher buying activity can be constructive, overheated conditions often precede short-term pullbacks, limiting the odds of a sustained recovery without stronger structural support.
Stellar price outlook: Momentum is cooling
Stellar traded around $0.195 on Tuesday, holding above the 50-day and 100-day exponential moving averages (EMAs) at $0.182 and $0.179, respectively.
This placement supports a neutral-to-slightly bullish short-term bias, but XLM remains capped by the 200-day EMA near $0.198.
Technical indicators show momentum is fading. The relative strength index (RSI) sits near 45, suggesting balanced market conditions. The MACD has dropped below the zero line, indicating weakening bullish momentum and increasing the risk of another downside move if buyers cannot regain control.
On the upside, immediate resistance is at the 200-day EMA around $0.198, with the next target near $0.226.
If sellers remain dominant, initial support sits at $0.185, followed by the 50-day EMA at $0.182.
A daily close below these levels would open the door to lower supports, exposing zones around $0.179 and $0.143.