The native asset of the Stellar network, XLM, is exhibiting a bearish trend as it hovers around $0.1684 on the daily chart. This follows a retracement from its October peak of $0.2370, bringing prices dangerously close to lower bands in recent weeks. Sellers maintain dominance in this market, with technical indicators amplifying the downward pressure.
Technical Indicators Signal Intensified Downward Pressure
One of the most concerning signals in the technical analysis is the formation of a death cross, indicating possible strengthening of the bearish trend. This occurs as the 50-day moving average crosses below the 100-day moving average on the XLM chart. The convergence of this line with the 200-day average at approximately $0.19 further accentuates the bearish outlook.
A death cross represents a technical signal where a short-term moving average falls below a long-term moving average, often linked to medium-term weakness—though it doesn’t provide an absolute direction.
All three significant moving averages are positioned above the current price, suggesting that any upward corrective movements could face resistance at these levels. As a result, short-lived recoveries alone are insufficient for a sustained upward push.
The decline of the 50-day average below the 100-day average, combined with the price staying under all major moving averages, underscores the persisting downward pressure on XLM.
Trading Below $0.18 Sustains Bearish Momentum
In October, XLM lost ground at the $0.19 and $0.18 regions without significant resistance. Subsequent recovery attempts have consistently ended lower, with the latest short-term rally stalling around $0.187 before dropping again, indicating buyers have yet to assert dominance.
Weakening trading volume aligns with this bearish scenario. A drop in volume alongside falling prices suggests limited buying interest at lower levels. Meanwhile, the Relative Strength Index (RSI) hovers near 40, indicating weak momentum but not yet reaching oversold territory, leaving room for further technical decline.
Should the recent low of around $0.167 be breached, the likelihood of XLM retreating towards $0.15 increases significantly.
Next Critical Threshold at $0.15
Continued downward movement puts $0.15 as the next strategic support level to monitor. The last approach to this area in August triggered buyer intervention, subsequently lifting prices above $0.22. This historical reaction makes the $0.15 level a focal point again, lying roughly 11% below the current price.
Failure to maintain the $0.15 level would shift the spotlight to $0.14, notable as a trading area in May. Conversely, to weaken the bearish outlook, XLM must first reclaim $0.18, then surpass the $0.19 mark against the backdrop of the 200-day moving average.
