On-chain Metrics and Market Analysis of Stellar (XLM)

• On-chain metrics revealed that exchanges have witnessed an outflow of $7.10 million worth of XLM.
• XLM traders have built $3.42 million in short positions at $0.306.

Amid market uncertainty, Stellar (XLM) has turned bearish and is poised for a significant price drop in the coming days.

On February 25, 2025, XLM recorded a 14% decline, failing to hold the crucial $0.31 support level, known for its strong price reversals.

With this considerable price drop in the past 24 hours, XLM was trading near the $0.279 level. During this period, its trading volume surged by 85%, indicating increased participation from traders and investors compared to previous days.

Stellar: Price Action and Upcoming Level

According to AMBCrypto’s technical analysis, XLM appears bearish after breaching its crucial support level of $0.31. Closing a daily candle below this level partially confirms this bearish outlook.

Following the support breakdown and bearish confirmation, there is a strong possibility that XLM could decline by 32% to reach the $0.19 level in the coming days. The asset reinforces its bearish price action by breaching the support of the 200 Exponential Moving Average (EMA) on the daily timeframe.

$7 Million Worth of XLM Outflow

Despite the overall bearish market sentiment and XLM’s continuous price decline, investors and long-term holders have been accumulating the token, according to on-chain analytics firm Coinglass.

Data from spot inflow/outflow reveals that exchanges have witnessed an outflow of $7.10 million worth of XLM in the past 48 hours. Such outflows during weak market sentiment can create buying pressure and drive further upward price momentum.

Traders’ $3.50 Million Short Bet

However, intraday traders are taking advantage of the current market sentiment by betting in the same direction as XLM’s price movement—on the short side. Data from Coinglass revealed that traders betting on short positions are currently dominating, with those on long positions appearing to be exhausted.

At press time, long-side traders are overleveraged at $0.272 and believe the price won’t fall below this level, building $802.5K worth of long positions. Meanwhile, traders betting on the short side are overleveraged at $0.306, predicting XLM’s price won’t rise above this level, building $3.42 million worth of short positions.

Combining these on-chain metrics with technical analysis suggests that long-term holders and investors are capitalizing on the recent price drop, potentially executing a “buy the dip” strategy, while XLM traders are following market sentiment and heavily betting on the short side.