As Stellar’s XLM token faces increasing selling pressure, a deeper look at recent price movements and market dynamics raises significant possibilities for investors.
Current market conditions have taken on a structure that questions XLM’s potential to sustain its price levels. Prominent exchange flows are among the factors determining the future of the token in this process.
“The third test of the $0.334 support this month marks a critical turning point for XLM,” he wrote.
Stellar’s XLM has formed a descending triangle formation on its daily charts, signaling a potential bear trend as it approaches key price levels. Currently trading at $0.342, XLM has tested the critical support level at $0.334 for the third time this month. These repeated tests are a sign that the support level is weakening, with each bounce occurring with less strength than the previous bounce. Market analysts are predicting that if XLM fails to break the $0.334 support and drops below the daily close of $0.325, the token could drop to $0.225.
Another factor that reinforced the bearish sentiment around XLM was data from on-chain analytics firm Coinglass, which observed an inflow of $3.9 million worth of XLM to exchanges. Such an inflow could signal increased selling activity and uncertainty among investors. In the cryptocurrency market, “inflows” usually refer to assets flowing from long-term investors to exchanges, a situation that predicts a possible price drop.
The latest data shows that XLM’s Open Interest has decreased by 4.5% in the last 24 hours. This decrease suggests that investors are hesitant to open new positions in the current market conditions. The current liquidity situation shows that there are main liquidation areas of $1.25 million for long positions at $0.342, while there is a total of $5.65 million for short positions at $0.373. This also shows that investors are speculating on the direction of the market.