XLM Faces 40% Price Drop Risk Amid Bearish Patterns

XLM, the native cryptocurrency of the Stellar network, is facing potential risks of a significant price drop, with bearish patterns sparking sell-off warnings. The current market dynamics suggest that XLM could be at risk of a 40% price decline, raising concerns among investors and traders.

The recent 64-minute outage on the XRP network, which briefly halted transactions, has not only affected investor confidence but also contributed to a decline in active addresses. The network's active addresses have dropped nearly 50% from their December peak, indicating a slowdown in network activity and reduced demand or lower transaction volumes.

The Chaikin Money Flow (CMF) indicator for XRP has weakened, with a decline from 0.26 two days ago to 0.19, suggesting that buying pressure has softened. Although the CMF remains positive, the decline signals a potential shift in market sentiment. If the CMF continues to consolidate around 0.19, XRP price could experience further consolidation, but a move below 0.15 may indicate increasing weakness, while a recovery above 0.25 could signal renewed buying strength.

The number of 7-day XRP active addresses is currently around 256,000, down from 407,000 nearly two weeks ago, marking a 37% decline. This drop suggests a slowdown in network activity, which could indicate reduced demand or lower transaction volumes. If active addresses continue to decline, it may reflect waning interest or participation in XRP transactions.

XRP's EMA lines indicate that a new death cross could form soon, with a short-term line crossing below its longest-term line. If this bearish signal plays out, XRP price may test the support at $2.32, and if that level is lost, it could drop further to $2.20. A continued decline in active addresses and a weakening CMF could push XRP below $2, with the next key support at $1.99. This would confirm a deeper bearish trend, making recovery more difficult, especially if new outages occur.

On the other hand, if the hype around XRP returns to levels seen in recent months, it could break the $2.60 resistance. A strong breakout above this level could lead to a test of $2.82