Stellar (XLM) Under Bearish Pressure Amid Technical Weakness and Supply Expansion

Generated by AI AgentCoin World
Friday, Aug 1, 2025 9:11 am ET1min read
XLM
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Aime RobotAime Summary

- Stellar (XLM) faces bearish technical pressure in August 2025 amid weak on-chain metrics and declining open interest.

- Visa's blockchain integration and smart money accumulation hint at potential recovery, contrasting with supply expansion risks.

- Key price levels at $0.40 and $0.393 remain critical as conflicting technical signals highlight market uncertainty.

- Foundation emphasizes protocol upgrades and stability, but autonomous price action underscores lack of institutional intervention.

Stellar (XLM) is under technical sell pressure in August 2025, with market conditions pointing to a bearish trend rather than a broader systemic risk or regulatory event. The decline has been attributed to internal market dynamics and technical indicators, without any significant warnings from the

Stellar
Development Foundation or notable institutional responses. Denelle Dixon, CEO and Executive Director of the foundation, emphasized ongoing protocol upgrades and no indication of a “Red August,” reaffirming long-term project stability.

Market data shows a reduction in open interest by over $200 million, signaling a pullback in speculative activity. On-chain analysis highlights isolated price weakness, with the 200-period EMA breakdown amplifying bearish sentiment. However, governance entities have not intervened, underscoring the autonomous nature of the current price movement. This period aligns with historical seasonal volatility seen in late summer for XLM, but active development and ecosystem growth contrast with narratives of instability [1].

Technical indicators present a mixed outlook. The Relative Strength Index (RSI) has moved out of overbought territory to around 52, suggesting a potential near-term rebound. The Stochastic oscillator shows XLM in oversold conditions, with %K at 8.96 and %D at 9.03, potentially indicating a buying opportunity for traders. However, On-Balance Volume (OBV) has continued to trend lower, suggesting a lack of conviction from large buyers despite recent price action [2].

A recent positive development is XLM’s integration into Visa’s blockchain settlement network, which could enhance its utility in cross-border payments and attract institutional adoption. Smart money activity also suggests accumulation, with the long/short ratio on Coinglass reaching 1.14—the highest in over a month. This, combined with the bullish pennant pattern forming near $0.40, has raised hopes of a potential rally toward $0.52 and beyond [3].

Nevertheless, risks remain. If XLM fails to break above $0.40, a retest of the 50-day EMA at $0.35 and further support at $0.393 could follow. Additionally, the release of 160 million PI tokens has increased XLM’s circulating supply, potentially adding downward pressure. With open interest declining and volume metrics weakening, traders are closely monitoring key price levels to determine the next phase of the market [4].

A successful breakout above $0.40 could see XLM test resistance at $0.52 and $0.63, while a breakdown would likely push the price toward critical support at $0.393. Given the conflicting signals in technical and on-chain data, the coming weeks will be pivotal in determining the direction of Stellar in a market at a crossroads.

Source: [1] Stellar Faces Increasing Outflows – Is XLM Price at Risk? (https://beincrypto.com/stellar-xlm-price-downside-risk-explained/)

[2] Stellar Price Forecast: XLM risks wedge breakdown as ... (https://www.mitrade.com/insights/news/live-news/article-3-1004667-20250801)

[3] Stellar (XLM) August outlook as bullish pennant forms (https://invezz.com/news/2025/07/31/stellar-xlm-august-outlook-as-bullish-pennant-forms/)

[4] Stellar (XLM) Bull Flag Breakout Shows Cracks as ... (https://www.mitrade.com/au/insights/news/live-news/article-3-999133-20250731)