Bitcoin News Today: Stellar XLM price drops 5.07% as technical breakdown below 10-day SMA sparks correction fears

Stellar (XLM) has entered a critical phase following its recent breakdown below the 10-day simple moving average (SMA), sparking concerns of a broader market correction. The cryptocurrency, currently trading at $0.42 as of July 7, 2025, has experienced a 5.07% intraday decline, marking a sharp reversal from its 75% rally in July [1]. This technical breakdown has intensified scrutiny over the sustainability of XLM’s recent upward momentum and its vulnerability to further sell-offs. The 13th-largest cryptocurrency by market capitalization now faces a pivotal test at the $0.42 support level, with analysts closely monitoring whether bulls can defend this psychological threshold [3]. A breakdown below this level could accelerate downward momentum toward the 50-day exponential moving average (EMA) at $0.40 [1].

The decline has coincided with heightened trading activity on centralized exchanges, though no significant institutional inflows or on-chain movements have been observed [2]. This suggests the correction is primarily driven by technical factors rather than fundamental shifts in XLM’s ecosystem. Notably, the Stellar Development Foundation—led by figures such as Denelle Dixon and Jed McCaleb—has issued no official statements addressing the price movement or roadmap adjustments [3]. Dixon’s recent remark, “No direct statements related to the recent technical break,” underscores the lack of direct intervention from key stakeholders [3].

Market dynamics reflect a mixed outlook. While bears have tightened their grip in the short term, bulls remain active, with some traders noting a “quiet return” of bullish momentum as XLM consolidates [2]. Technical indicators, however, paint a cautionary picture. The Relative Strength Index (RSI) for XLM shows signs of exhaustion after failed attempts to break out of overbought territory, while declining volume during recent rallies signals waning buyer confidence [1]. These factors heighten the risk of a prolonged correction, particularly if XLM fails to retest and hold above $0.45.

Price forecasts introduce additional nuance. Bitget projects an 88% price fluctuation in July 2025, targeting $0.4479 by month-end, but this forecast assumes a recovery scenario and excludes the possibility of further technical breakdowns [4]. Meanwhile, broader market trends—such as consolidation in Bitcoin (BTC) and Ethereum (ETH)—suggest XLM’s correction aligns with macroeconomic pressures rather than isolated technical vulnerabilities [5]. Investors are advised to monitor the $0.42–$0.45 range, as a sustained close above this zone could reignite bullish momentum. Conversely, a confirmed breakdown below $0.42 may signal a deeper pullback toward historical support levels.

The absence of major institutional or on-chain activity suggests this correction is likely a temporary adjustment rather than a structural decline [2]. However, the lack of stabilizing interventions from the Stellar Development Foundation and the absence of protocol-level risks leave the market reliant on technical resilience for a rebound.

[1] Blockchain (2025-07-07): https://blockchain.news/news/20250728-stellar-xlm-faces-pullback-to-042-despite-75-july-rally

[2] Coinbase (2025-07-15): https://www.coinbase.com/en-gb/price/stellar

[3] Stocktwits (2025-07-09): https://stocktwits.com/symbol/XLM.X

[4] Bitget (2025-07-08): https://www.bitget.com/price/stellar/price-prediction

[5] U.Today (2025-07-11): https://u.today/xrp-has-hidden-danger-brewing-ethereums-eth-unstoppable-rally-continues-bitcoin-btc-clear