The native asset of the Stellar network, XLM, is at risk of substantial losses as a bearish pattern emerges in its four-hour price chart. With the altcoin struggling to hold above a crucial support level, technical indicators and prevailing market sentiment suggest a possible 30% decline. Analysts warn that if XLM closes below the $0.265 threshold, it could plunge to $0.19.
Technical Analysis: A Bearish Head and Shoulders Pattern
XLM’s chart has formed a classic head and shoulders pattern, a well-known bearish indicator that typically signals a potential downtrend. The asset is also trading below the 200 Exponential Moving Average (EMA) in both daily and four-hour timeframes, further reinforcing the negative outlook. If XLM fails to maintain its footing above $0.265, traders anticipate a downward move toward $0.19 in the near term.
Recent trading activity has not been favorable for XLM, with the cryptocurrency losing over 4.5% of its value and hovering around $0.275. Trading volume has plummeted by 35%, reflecting growing hesitation among investors. Additionally, a cluster of over-leveraged positions around the $0.27 mark raises concerns about liquidation risks, which could intensify selling pressure.
Macroeconomic Factors and Broader Market Impact
Beyond technical signals, XLM’s performance is also being influenced by macroeconomic headwinds and broader cryptocurrency market volatility. With Bitcoin experiencing fluctuations and global economic uncertainties weighing on risk assets, XLM remains vulnerable to sharp price swings. If key support levels are breached, automated stop-loss orders could trigger a cascade of sell-offs, exacerbating the downward trend.
Key Takeaways:
- A bearish head and shoulders pattern suggests a potential drop to $0.19.
- XLM is trading below major moving averages, reinforcing a negative outlook.
- Declining volume and high liquidation risks could add to selling pressure.
- Macroeconomic uncertainty and Bitcoin’s volatility may further impact price movements.
As market sentiment remains cautious, traders are closely watching the $0.265 support level. A decisive break below this mark could set the stage for further losses, making the coming days crucial for XLM’s price trajectory.
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.
Also Read: Stellar (XLM) Faces Bearish Threat: Experts Warn of Potential 30% Drop Amid Market Uncertainty
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