XLM's bearish setup worsens as price action, volume, and technicals hint at more pain ahead.
Share
Key Takeaways
XLM is trading inside a descending channel, typically a bearish continuation pattern.
The CMF and Parabolic SAR readings suggest fading demand and increased resistance.
The 4-hour MACD confirms downward pressure, with no sign of a bullish crossover yet.
Stellar (XLM) price, despite outperforming many altcoins during the last quarter of 2024, has struggled this year. Earlier in the year, XLM’s price closed at $0.50.
Today, the market value is struggling to trade above $0.25, an 8.86% decline in the last seven days. As a result, XLM’s structure on several timeframes has yet to improve.
In this analysis, using several indicators, CCN reveals why XLM might not experience a notable rebound soon.
XLM Bulls on the Back Foot
On the daily chart, XLM’s price trades within a descending channel. Also called a falling channel, a descending channel is a bearish pattern formed by drawing two downward-sloping parallel trendlines that contain a series of lower highs and lower lows.
The upper trendline indicates resistance while the lower one represents support. Amid this technical setup, the XLM/USD daily chart shows that the Chaikin Money Flow (CMF) reading has dropped below the zero signal line.
The decline in the CMF reading indicates rising selling pressure, meaning demand for the altcoin is nowhere near the bearish sentiment around it. A closer examination of the chart also shows that the dots of the Parabolic Stop And Reverse (SAR) indicator have climbed above XLM’s price.
When the dots are below the price, they indicate strong support, which can drive a price increase. However, when they are above the price, they represent resistance, which is the case with XLM.
Should this trend remain the same, XLM might experience a decline below the $0.22 support line.
XLM Price Analysis: Another Breakdown Likely
Zooming into the 4-hour chart, we noted that the Moving Average Convergence Divergence (MACD) has turned negative. The MACD measures momentum by examining the difference between two key Exponential Moving Averages (EMAs).
The trend is bearish when the 26 EMA (orange) is above the 12 EMA (blue). On the other hand, if the 12 EMA crosses above the 26 EMA, the trend is bullish.
The MACD is negative, indicating bearish momentum, and the 12 EMA is below the 26 EMA, reinforcing the trend.
As long as bulls are absent, XLM’s price might struggle to bounce. Instead, the cryptocurrency’s next move could be to lose the $0.22 support at the 0.236 Fibonacci level.
If validated, XLM’s price might drop to $0.20. However, if momentum turns bullish and a positive crossover appears, the next move could be a break above the $0.28 resistance.
If that were to happen, the cryptocurrency’s market value might rise to $0.30. If the broader market conditions become highly bullish, the price might jump closer to its yearly high.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Victor Olanrewaju is a crypto analyst and reporter at CCN with deep roots in on-chain research and technical analysis. His crypto journey began in 2017, but it was the 2020 Uniswap airdrop that sparked a full-time pivot into the space.
With a foundation in copywriting, Victor honed his craft creating high-converting content for leading crypto brokers — most notably an XRP price prediction that ranked #1 on Google during the 2021 bull run.
He later joined AMBCrypto in 2022, where he combined storytelling with technical and on-chain analysis to cover key market narratives.
In 2024, he expanded his expertise at BeInCrypto, collaborating with analysts and using tools like Glassnode, Santiment, and IntoTheBlock to break down Bitcoin and altcoin trends.
At CCN, Victor covers the top cryptocurrencies, memecoins, macro shifts, blending real-time insights with deep-dive metrics.
He holds a Bachelor’s degree in Physics from the University of Ibadan, equipping him to simplify complex data for a wide audience. Follow his work or connect on LinkedIn or X.
