The recent drop in the price of Stellar (XLM) has led to the formation of the first major bearish signal this year. The anticipated consequences of this situation are being discussed within the cryptocurrency community.
What is a 'Death Cross'?
A death cross is a technical signal that occurs when the 50-day moving average (SMA) crosses below the 200-day SMA. This is considered a negative indicator, often signaling the beginning of a potential downward trend. On Stellar's chart, this signal has been observed for the first time since mid-2024.
Current Market Situation
At press time, XLM was down 6.33% in the last 24 hours, reaching $0.23, with a total weekly decline of 16%. The market continues to be under pressure, with significant declines observed among major crypto assets like Bitcoin, Ethereum, XRP, and Solana. Weak market sentiment and uncertainty around macroeconomic conditions are contributing to this downturn.
Prospects for Stellar (XLM)
Despite the death cross formation, it does not always indicate prolonged bear markets. However, this situation serves as a caution sign, especially when accompanied by price weakness and declining momentum. XLM has rebounded from lows of $0.20 and is currently at $0.239. If the upward trend continues, the cryptocurrency may aim to breach the 50 and 200 daily moving averages at $0.284 and $0.287 respectively. Otherwise, a retest of support at $0.20 may occur.
The formation of a death cross for Stellar (XLM) raises questions about the future state of the market. Analyzing current trends and support levels will be crucial for investors and traders in the coming days.
