Key Points
- Stellar (XLM) fell 3.4% and is now trading around $0.22.
- Derivatives data point to increasing bearish positioning, with a renewed downside risk expected in the short term.
XLM derivatives point to further downside
Stellar (XLM) has been trading in the red for a seventh straight day, losing 3.4% over the last 24 hours. This ongoing weakness comes amid a broad crypto market pullback, and XLM is now poised to retest its April lows in the near term.
Derivatives data for XLM suggest the bearish momentum could intensify. Data from CoinGlass show that open interest (OI) in XLM futures has declined sharply to $118.43 million, down from $124.72 million recorded yesterday.
A falling OI points to a shrinking notional value of XLM futures contracts, meaning the aggregate size of active positions (both longs and shorts) is decreasing.
As prices dropped, long liquidations in the last 24 hours totaled $406,740, outweighing short liquidations of $6,040. The long/short ratio chart shows short positions rising to 53.37% today, up from 50.57% on Monday.
XLM may fall below the psychological $0.20 level
The XLM/USD 4-hour chart is bearish and showing inefficiency, as Stellar has underperformed over the past seven days. The token is trading around $0.222 and is retesting the June low near $0.217.
If the bearish trend continues, XLM could slip below the $0.2001 level marked by the April 7 low. A prolonged downtrend could push the cross-border payments token toward support at $0.1642, followed by the annual low near $0.1600.
Technical indicators currently favor sellers. The relative strength index (RSI) sits at 35, edging toward oversold territory. Meanwhile, the moving average convergence divergence (MACD) has fallen sharply after crossing the signal line a few hours ago.
Conversely, if bulls regain control, XLM could halt the decline and attempt a rebound to test the former support, now resistance, around $0.2579.