Stellar (XLM), the native token of the Stellar network and a competitor to XRP, is facing a potential price decline as it shows signs of a bearish pattern on the four-hour timeframe. The cryptocurrency is currently holding above a crucial level, but the overall market sentiment and continuous price drops have pushed it to a critical make-or-break point.
Technical analysis experts have identified a bearish head and shoulders pattern on the XLM chart, indicating a potential breakout as the cryptocurrency approaches the neckline. If XLM breaches this level and closes a four-hour candle below $0.265, there is a high likelihood that it could experience a significant drop of around 30% to reach $0.19 in the near future.
The ongoing bearish sentiment in the market has already pushed XLM below the 200 Exponential Moving Average (EMA) on both daily and four-hour timeframes, signaling a downward trend in both the short and long term.
As of the latest trading data, XLM is currently trading near $0.275, with a price decrease of over 4.5% in the past 24 hours. The trading volume has also dropped by 35% during the same period, indicating reduced participation from traders and investors compared to previous days.
Traders are currently over-leveraged with positions at $0.27 on the lower end and $0.285 on the upper end, as reported by the on-chain analytics firm Coinglass. Data shows that traders have accumulated $500K worth of long positions at the lower level and $2 million worth of positions at the upper level, suggesting a prevailing bearish sentiment in the market and a potential short-term decline for XLM.
In conclusion, the technical analysis and market data point towards a possible price decline for XLM in the coming days. Traders should closely monitor the key levels mentioned and be prepared for potential downside risks.