After a 100% surge last week, Stellar (XLM) is showing signs of cooling down, as recent data points to a sharp drop in market interest. Here’s a detailed look at the latest developments surrounding XLM and its potential price action.

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📉 Declining Open Interest: A Sign of Waning Momentum

Open Interest (OI), a measure of derivative market activity, has seen a dramatic drop from an all-time high of $339 million to $209 million.

This $130 million reduction in OI suggests that many positions have been closed, signaling diminishing buying pressure.

In line with this, XLM's price has dropped by 10% over the past 24 hours, signaling the cooling of the bullish momentum.

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📊 Social Dominance Decline: Less Buzz Around XLM

Social dominance (a metric that tracks the volume of discussions around XLM compared to the top 100 cryptocurrencies) has plummeted from 3.13% to 1.73%.

This decline shows that market participants are shifting their focus elsewhere, leading to reduced demand and potentially less retail interest in XLM.

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🔍 Technical Indicators: A Potential Retracement to $0.28?

The Money Flow Index (MFI) has pulled back from overbought territory, which historically signals an impending price correction.

With $0.45 acting as a crucial support level, XLM may struggle to maintain its recent price above this mark.

If the selling pressure persists, XLM could face a retracement to $0.28 or even $0.17 if further support levels fail.

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💡 Can XLM Bounce Back?

The decline in both Open Interest and social dominance suggests that the bullish rally may be over. However, a revival in buying pressure across both the derivatives and spot markets could push XLM back toward $0.64, invalidating the bearish outlook.

📈 What’s Next for XLM?

If the market continues its downturn, XLM may face significant challenges maintaining price levels above $0.45.

However, with a shift in market dynamics or a potential resurgence in interest, XLM could see a recovery, potentially testing higher levels once again.

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📱 Your Turn!

What do you think about XLM's recent performance? Is it time to take profits or are you waiting for a bounce back? Drop your thoughts below and let’s discuss!

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