Key Points
- XLM has declined by less than 1% and is trading below $0.22.
- The coin may retest the support level at $0.20 if the bearish trend continues.
The cryptocurrency market is witnessing a bullish trend, with Bitcoin and other major cryptocurrencies showing positive movement. Bitcoin is trading above $87,000 after briefly dipping below $86,000 earlier today.
However, several major altcoins, including Stellar’s XLM, remain in the red despite the broader market’s positive outlook. At the time of writing, XLM is struggling to maintain its position below $0.22 after failing to close above a key resistance level earlier this week.
Bearish momentum continues to strengthen, indicated by increased open interest (OI) and seller positions. If this trend persists, XLM may face additional selling pressure in the short term.
XLM Derivatives Data Indicates Bearish Sentiment
The primary factor contributing to XLM’s declining performance stems from derivative products and on-chain data. According to CoinGlass, open interest (OI) for XLM futures has surged to $112 million in the past 24 hours, up from $30 million the previous day.
However, this increase in OI has not translated to positive performance for the coin, which continues to trade below a significant support level.
Furthermore, CoinGlass’s long/short ratio for XLM stands at 0.91, the highest level in nearly a month. This suggests that despite the rising OI, bearish sentiment persists among traders, with many betting against XLM’s price increase.
XLM Could Drop Below $0.20
The XLM/USD 4-hour chart shows a bearish trend, reflecting the coin’s underperformance in recent days. At the time of writing, XLM is trading at $0.21 and may experience further losses in the short term.
If the bearish trend continues, XLM may retest its low from December 18 at $0.20. A close below this psychological level could extend the decline towards the annual low of $0.16, established on October 10.
The RSI on the 4-hour chart is currently at 43, below the neutral level of 50, indicating growing bearish momentum. Additionally, the moving average convergence divergence (MACD) lines are converging, signaling indecision among traders.
Conversely, if XLM manages to rebound, it could bounce back toward the key resistance level at $0.22 in the coming hours.
John is a seasoned journalist at The Bothside News, specializing in balanced reporting across news, sports, business, and lifestyle. He believes in presenting multiple perspectives to help readers form informed opinions. His work embodies the publication’s philosophy that truth emerges from examining all sides of every story.
