Stellar Lumens (XLM) price has declined significantly, down 35% from its May peak, and with negative funding rates, support may drop to $0.15.
Support Levels and Negative Funding Rates
This week, Stellar Lumens price fell to a significant support level at $0.2175, marking a 35% drop from its May peak. Data shows that the funding rate for XLM dropped to its lowest level since June 30 and has remained negative on most days since May. A negative funding rate indicates that more traders are taking short positions, which typically reflects expectations of further downside. If the $0.2175 support breaks, XLM could decline to $0.15, suggesting a potential 36% loss.
Technical Indicators and Market Structure
Technical analysis of XLM reveals that the token broke below key moving averages, including the 50-day and 100-day exponential moving averages. The price also fell under the 61.8% Fibonacci retracement level, often viewed as a potential rebound point. The descending triangle pattern observed in the daily chart is considered a bearish continuation pattern, indicating a likely breakdown if support fails.
Network Activity Growth Amid Price Pressure
Despite the bearish price trend, on-chain data indicates steady network growth. The number of operations on the Stellar network reached 197 million in June, while the supply of stablecoins hit a record high of $667 million. Tokenization of real-world assets on Stellar has also grown, with a total value locked now standing at $487 million. Nansen reported an 11% increase in network transactions over the past week, totaling 18.2 million. Active addresses increased by 10% to 146,700 during the same period, suggesting a growing discrepancy between network performance and the market cap of Stellar tokens.
The situation with Stellar Lumens indicates a complex market state, where negative funding rates contrast with growing network activity. The anticipated price drop to $0.15 could trigger additional changes in trader and investor behavior.
