Stellar (XLM) continues to trade under pressure as broader weakness across the crypto market weighs on altcoins. The token has declined steadily over recent sessions, confirming a bearish technical structure and reinforcing short-term downside risks.
However, while price action remains soft, derivatives positioning and on-chain indicators suggest the underlying picture may be more complex than it appears on the surface.
Bearish Positioning Dominates Derivatives Markets
Derivatives data points to a clear imbalance in trader sentiment. According to liquidation maps, approximately 68% of open positions are skewed toward shorts, highlighting strong bearish conviction. When positioning becomes this one-sided, the market often becomes more sensitive to volatility, as crowded trades can amplify price moves in either direction.
Below current price levels, a notable cluster of long liquidation leverage is concentrated between $0.20 and $0.185. A move into this zone could trigger forced liquidations, increasing sell-side pressure and accelerating a downside move. This liquidity setup explains why many short-term traders remain focused on further downside scenarios, especially if key support levels fail.
Early Signs of Accumulation Emerge
Despite the bearish bias in derivatives markets, momentum indicators are beginning to show early divergence. The Chaikin Money Flow (CMF) indicator has printed higher lows for four consecutive days, even as XLM price action continues to form lower lows.
CMF measures buying and selling pressure by combining price and volume data. When CMF rises during a price decline, it often suggests capital inflows and accumulation, rather than distribution. In Stellar’s case, this divergence implies that some market participants may be gradually building positions beneath the surface, potentially laying the groundwork for a short-term rebound once selling pressure weakens.
Key Levels Define the Near-Term Outlook
At the time of writing, XLM is trading near $0.212, holding just above the $0.210 support zone. Earlier this week, Stellar broke down from a descending triangle pattern, a structure that typically favors bearish continuation. That breakdown keeps downside risks elevated in the near term.
Based on the pattern’s measured move, the structure projects a potential decline of around 14%, targeting the $0.188 region. This places price roughly 11% away from the projected objective. However, markets do not always move in straight lines, and stabilization could occur earlier.
Intermediate support may emerge around $0.210, with a deeper support zone near $0.201. As long as price remains below the descending triangle’s former support, the outlook remains neutral-to-bearish.
A meaningful shift in momentum would depend on XLM successfully defending current levels. If $0.210 holds, Stellar could begin to stabilize. A sustained rebound could open the path toward the $0.230 resistance area. Reclaiming that level would invalidate the bearish structure and suggest a short-term reversal driven by improving demand and potential short covering.
Conclusion
While XLM’s price action remains under pressure and short positioning dominates derivatives markets, early signs of accumulation hint that downside momentum may be slowing. Whether this develops into a reversal or merely a pause will depend on how price reacts around key support and resistance levels in the coming sessions.
This article is provided for informational purposes only and reflects a personal blog-style analysis. It does not constitute investment advice. Readers should conduct their own research before making any financial decisions. The author is not responsible for any investment outcomes.
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