Important points
- Stellar’s XLM has fallen 3.4% and is currently trading around $0.22.
- Derivatives data suggests bearish position building and further declines are expected in the near term.
XLM derivatives hint at further bearish price action
Stellar (XLM) has been trading in the red zone for seven consecutive days, losing 3.4% of its value in the past 24 hours. The bearish performance comes as the entire crypto market is hemorrhaging, with XLM expected to retest April lows in the short term.
XLM’s derivatives data indicates that the bearish trend may further strengthen. data obtained from coin glass XLM futures open interest (OI) is showing a significant downward trend at $118.43 million, down from the $124.72 million recorded yesterday.
The decline in OI signals a decline in the notional value of XLM futures, which now reduces the total value of all active positions (long and short).
Due to the decline in XLM, long-term liquidations in the past 24 hours totaled $406,740, exceeding short-term liquidations of $6,040. The long-to-short ratio graph shows that short positions increased from 50.57% recorded on Monday to 53.37% today.
XLM could fall below the psychological level of $0.20
The 4-hour chart of XLM/USD is bearish and inefficient as Stellar has underperformed for the past 7 days. The coin is currently trading at $0.222, retesting the June low of $0.217.
If the bearish trend continues, XLM could fall below the $0.2001 level marked by the April 7 low. If the bearish trend continues, the cross-border remittance token could aim for support at $0.1642 and then towards year-to-date lows at $0.1600.
Technical indicators are currently bearish, suggesting that sellers are in control. The relative strength index (RSI) is 35, pointing to the oversold zone. Additionally, the Moving Average Convergence Divergence (MACD) has fallen sharply after falling below the signal line a few hours ago.
However, if the bulls regain control, XLM could reverse the bearish narrative and retest the $0.2579 support-turned-resistance level.
