Stellar’s native asset, XLM, is currently at risk of a significant downturn as a bearish formation emerges on the four-hour chart. The altcoin is struggling to maintain its footing above a key support level, but negative market sentiment and technical indicators suggest a potential decline of up to 30% in the near term. Analysts warn that XLM has formed a head and shoulders pattern, which could lead to a price drop toward $0.19 if the coin fails to hold above $0.265.
XLM Technical Analysis and Bearish Outlook
The head and shoulders formation observed on XLM’s four-hour chart is a well-known bearish signal. For this pattern to complete, the asset must see sustained price action below $0.265. A breakdown below this level would confirm a technical target of $0.19, reinforcing the downward trajectory.
Further exacerbating bearish concerns, XLM is currently trading below the 200 Exponential Moving Average (EMA) on both daily and four-hour timeframes. This technical indicator suggests that the asset remains under selling pressure, making a short-term recovery unlikely unless buying volume significantly increases.
Market Data on Stellar (XLM)
Over the past 24 hours, XLM has lost more than 4.5% of its value, currently hovering around $0.275. A 35% decline in trading volume suggests that market participants are exhibiting caution, with many opting to stay on the sidelines. Analysts highlight the liquidation risk for over-leveraged long positions around the $0.27 mark, which could amplify selling pressure.
According to Coinglass data, approximately $500,000 in long positions have accumulated at $0.27, with an additional $2 million in positions at $0.285. This concentration of leveraged bets further supports the bearish scenario, as a price drop below key support levels could trigger mass liquidations and accelerate the downtrend.
Also Read: Stellar (XLM) Poised for Major Breakout as Bullish Flag Forms, Analyst Predicts $1.60 Target
Low market participation, Bitcoin’s price volatility, and broader macroeconomic uncertainty continue to weigh heavily on altcoins like XLM. If Stellar fails to maintain its current support levels, a cascading effect of stop-loss triggers could drive prices further down toward the $0.19 target. Investors should closely monitor XLM’s price action and market sentiment to assess potential recovery or deeper losses in the coming weeks.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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