Key Takeaways
- Stellar (XLM) fell 3.4% and is trading near $0.22.
- Derivatives data point to a bearish accumulation of positions, suggesting further downward pressure in the near term.
Derivatives Suggest Continued Bearish Momentum for XLM
Stellar (XLM) has been trading in the red for seven consecutive days, losing 3.4% of its value over the past 24 hours. The decline is occurring as the broader crypto market cools, and XLM is poised to retest its April low in the near term.
Derivatives metrics for XLM indicate the bearish trend may intensify. Data from CoinGlass show that futures open interest (OI) for XLM is in a notable downtrend — $118.43 million, down from $124.72 million recorded yesterday.
A decline in OI signals a reduction in the notional value of XLM futures, meaning the aggregate value of all active positions (both long and short) is decreasing.
As XLM slipped, long liquidations over the last 24 hours totaled $406,740, outpacing short liquidations by $6,040. The long-to-short ratio chart shows shorts rose to 53.37% today, up from 50.57% on Monday.
XLM Could Drop Below the $0.20 Psychological Level
The 4-hour XLM/USD chart appears bearish and inefficient, reflecting Stellar’s underperformance over the past week. The coin is trading around $0.222, revisiting the June low of $0.217.
If the bearish trend continues, XLM could slip below $0.2001, the April 7 low. A sustained downtrend may push the cross-border payments token toward support at $0.1642, followed by its yearly low near $0.1600.
Technical indicators currently favor sellers. The Relative Strength Index (RSI) sits around 35, indicating an oversold zone. Additionally, the Moving Average Convergence Divergence (MACD) has sharply fallen after crossing below the signal line several hours ago.
However, if bulls regain control, XLM could reverse the bearish narrative and retest $0.2579, which has flipped from support to resistance.