XLM Price Falls 12% As Stellar Traders Withdraw $196 Million

Stellar’s (XLM) price has been on a downward trend after a period of sideways movement that failed to spark a bullish breakout. 

The altcoin has recently experienced a significant decline, with traders withdrawing approximately $196 million from the market. This mass exit is putting further downward pressure on XLM, signaling uncertainty among investors.

Stellar Traders Are Bearish

Over the past week, XLM has seen a 33% drop in Open Interest, indicating a shift in investor sentiment. This substantial reduction in trading activity points to a lack of confidence in the direction of XLM’s price. The withdrawal of $196 million from the derivatives market shows that traders are either unsure of the altcoin’s next move or are opting to wait on the sidelines rather than take on new positions.

The decision to exit rather than initiate new trades suggests that traders are not ready to commit to either a bullish or bearish stance. This lack of conviction typically precedes a period of increased volatility or consolidation, and in XLM’s case, the trend seems to be skewed toward further price corrections.

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Looking at the broader technical picture, the MACD (Moving Average Convergence Divergence) indicator is signaling a bearish outlook for XLM. After three weeks of bullish momentum, the recent bearish crossover observed in the past 24 hours has turned the tide.

The MACD’s bearish crossover is often a reliable indicator of a potential price decline, signaling that the market’s sentiment is turning negative. In XLM’s case, this development adds to the mounting uncertainty and could make it challenging for the altcoin to recover quickly.

Can XLM Price Pull Back?

At the time of writing, XLM is down 12% over the last 48 hours, trading at $0.415. Despite holding above the support level of $0.412, the recent bearish developments make it likely that XLM could see further price corrections in the coming days.

Given the current market conditions and technical indicators, XLM may fall through the $0.412 support level, potentially slipping further to $0.359. This decline would extend the losses that investors have already experienced.

However, should new investors step in and accumulate XLM at lower prices, the altcoin could experience a reversal. If XLM successfully bounces off the $0.412 support, it may rise past $0.439 and reach $0.470. This would invalidate the bearish thesis and shift the market sentiment back toward a more positive outlook.