XLM Price Analysis

• XLM has lost 11.1% of its value over the last 7 days
• Analyst believes a drop to $0.23 may be next if Stellar fails to hold $0.27 as support

Since hitting a local high of $0.3344 a week ago, Stellar [XLM] has traded within a descending channel. Over the past week, XLM has declined to hit a local high of $0.276. In fact, at the time of writing, XLM was trading at $0.2799.

This marked a 4.26% decline in 24 hours. On the weekly charts, the altcoin was down by 11.1%.

This strong decline over the past week has left crypto analysts discussing the altcoin’s trajectory. One of them is Ali Martinez, who hinted at a prospective decline to $0.23.

In his analysis, Martinez noted that Stellar could face a strong price correction as bearish momentum builds. According to him, XLM must hold the $0.27-level to avoid further losses. A breach below this level will see the altcoin find the next support around $0.23.

Is the altcoin set for further losses?

According to AMBCrypto’s analysis, Stellar has been seeing strong downward pressure as bears take hold of the market.

We can see this bearishness as investors take a step back in the market. Consider this – Stellar’s Open Interest aggregated by exchanges has declined for 6 consecutive days. At press time, the altcoin’s Open Interest sat at $38 million – a decline from $49 million. When Open Interest falls, it means that new investors are not opening new positions while existing ones are exiting the market.

Additionally, the altcoin’s funding rate has slipped into negative territory again. A slip into this zone means that even those opening positions as Open Interest declines have been mostly going short. Thus, a majority of market participants are betting on the price to fall – a sign of strong bearish sentiments.

Stellar’s RSI has continued to decline on the charts. Since making a bearish crossover 5 days ago, the RSI has dropped to 48, with its MA rising to 58. This could indicate a bearish bias, with sellers having strong control of the market.

These sellers have offloaded 82.62 million XLM tokens over the past 24 hours, according to Coinalyze data. A negative delta of -15.6 million XLM means that bears are currently dominating the market.

Simply put, Stellar is under strong downward pressure with bears in control. Continuing this trend will likely result in further losses for XLM. If the bears maintain their dominance, the selling pressure will push the price lower.

A drop from the current rates will see XLM find support around $0.263. If this fails to hold, further declines could send XLM to $0.252. In the short term, the predicted drop to $0.23 may be unlikely unless there is a sustained decline.

For a trend reversal, though, XLM must hold above $0.27.