Stellar’s price remains under pressure as the broader crypto market downturn weighs on altcoins. XLM has been steadily declining, confirming a bearish chart pattern and reinforcing near-term downside risks.
While traders may be looking to capitalize on this momentum, on-chain actions suggest a different position for XLM holders.
Stella Holder may be able to rescue XLM
Derivatives data highlights a clear imbalance in market positioning. The liquidation map shows that exposure is skewed approximately 68% towards short traders, indicating strong bearish conviction. Such an advantage often increases sensitivity to volatility, as crowded trades amplify price reactions when momentum changes.
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Below current levels, a dense zone of long-term liquidation leverage lies between $0.20 and $0.185. Entry into this zone could trigger a forced liquidation, adding selling pressure and accelerating the decline. This setup explains why bears are eyeing further downside as liquidity pockets remain vulnerable below major support.
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Despite the bearish positioning, macro indicators are showing early signs of divergence. Even though XLM price recorded lower lows, Chaikin Money Flow formed higher lows for 4 consecutive days. This bullish divergence suggests that capital inflows are increasing behind the scenes.
CMF tracks buying and selling pressure through price and volume. CMF increases during declining prices often indicate accumulation rather than distribution. For Stellar, this pattern means investors are gradually building positions, creating conditions that could lead to a short-term reversal if selling pressure eases.
XLM price needs to secure support
XLM is trading around $0.212 at the time of writing, just above the $0.210 support level. Earlier this week, altcoins broke out of a descending triangle pattern, a formation that typically favors bearish continuation. Due to this breakdown, downside risks remain elevated in the short term.
The descending triangle predicts a possible 14% downside towards $0.188, putting XLM about 11% away from the target. However, the price is likely to stabilize before reaching that level. Support is likely near $0.210, with a worst-case scenario of $0.201. This uncertainty supports a neutral to bearish outlook.
Momentum changes depend on key levels of defense. Stellar may regain stability if $0.210 holds as support. A continued pullback could push XLM towards the $0.230 resistance zone. A return to this level would invalidate the bearish pattern and signal a near-term reversal due to improving demand.
