The situation with Stellar (XLM) has garnered attention due to recent significant declines. Despite impressive growth over the year, current indicators signal increasing selling pressures.
Weakness in the Futures Market
The futures market is showing weakness, creating additional challenges for Stellar. Open positions in futures have decreased from a peak of $588.53 million on July 18 to $306.22 million, diminishing the likelihood of bullish momentum.
Technical Indicators
Technical indicators such as Exponential Moving Averages (EMA) suggest bearish signals for Stellar in the short and medium term. The crossover of 20 EMA with 50 EMA on the 12-hour chart denotes seller dominance, and a potential drop of 50 EMA below 200 EMA on the 4-hour chart may indicate further downturns.
Descending Triangle as a Signal
A descending triangle is forming on daily charts, indicating further weakness. Prices fluctuate around $0.39, but breaking support at $0.38 and $0.36 could lead to a drop to $0.23. Major reasons for the grim outlook include decreasing futures trading volume, bearish EMA crossover, and the presence of the descending triangle.
Future positivity may only occur with a breakout above $0.43, which could initiate an optimistic trend and ease the current selling pressure.
