As tensions between the United States and Iran escalate, the broader crypto market is under significant pressure. Amid this uncertainty, Stellar (XLM) appears to be opening the door to further bearish momentum.
However, XLM is not driven solely by geopolitical tensions. Instead, they were accompanied by the formation of a bearish price trend on the chart.
On February 28, XLM fell by over 9.95% in just 24 hours, with the altcoin valued at $0.1486 on the charts. Despite the drop in prices, the participation of traders and investors has increased significantly. This was reflected in trading volume which jumped 17% to $125.89 million.
XLM Price Action and Key Levels to Watch
Despite market uncertainty, popular crypto analyst Ali Martinez recently shared an article on X highlighting key support levels for XLM. In the article, the expert noted that $0.147, $0.078, and $0.041 are key levels for the altcoin.
Source: X/alicharts
Additionally, if we look at the daily chart, it appears that XLM price has formed a bearish head and shoulders pattern below the key support level of $0.158.
Based on the price action, if the bearish momentum of
However, XLM’s bearish thesis would only be validated if the price closes below the $0.145 level. Otherwise it would be invalidated.
Source: TradingView
At press time, the average directional index (ADX), an indicator that measures the strength of a trend, had reached 30.40.
It was above the key threshold of 25 – indicating strong momentum in the altcoin market.
Derivatives Tool Shows Mixed Feelings
A look at market structure also suggests that long-term holders could seize this decline as an opportunity. Short-term participants can follow the market trend by betting heavily on short positions as well.
According to derivatives tool Coinglass, intraday traders are betting heavily on $0.149 on the lower side (support) and $0.1619 on the higher side (resistance). They built long leveraged positions worth $296,000 and short leveraged positions worth $1.49 million.
These bets revealed that traders with a bearish view dominate the current market, believing that XLM price will not break through the $0.1619 level anytime soon.
Source: Coinglass
On the other hand, the XLM spot inflow/outflow metric revealed that a modest $319.79k worth of the asset left exchanges in the last 24 hours – a sign of potential accumulation.
Source: Coinglass
Combining these metrics, it would appear that XLM is bearish in the near term. In the long term, however, an ideal buying opportunity could be on the horizon.
Final Summary
- Stellar (XLM) is poised for a massive decline due to escalating geopolitical tensions and the formation of a downward price trend.
- XLM could fall another 28% if it fails to hold the $0.145 support level.
