Stellar (XLM) Breaks Below 10-Day SMA, Price Drops 6% as Bearish Momentum Builds

Stellar (XLM) has fallen below its 10-day simple moving average (SMA), a critical technical level that had previously acted as support during its recent price rally [1]. This breakdown, occurring after XLM surged from below $0.30 to over $0.50 in July, has triggered concerns about short-term weakness. As of the latest data, XLM trades at $0.43, down nearly 6% on the day, with the 7-day decline reaching approximately 8%. The candlestick that breached the SMA closed with higher selling volume, signaling a shift in momentum [1].

Technical analysts have highlighted the significance of this move. Chart analyst Ali Martinez noted that the loss of the 10-day SMA could open the door for bearish pressure, emphasizing that “bullish above, bearish below” the level [1]. Meanwhile, Javon Marks drew parallels to XLM’s 2015–2018 cycle, which featured a wedge pattern followed by a sharp rebound. Marks projected potential price targets of $0.79783 and $8.00 if the asset regains strength above key resistance zones, though these remain speculative forecasts [1]. Trader Peter Brandt warned that XLM must hold above $0.22 and close decisively above $1 to avoid being range-bound, stressing that failure to meet these thresholds could prolong stagnation [1].

The Bull-Bear Power (BBP) indicator has turned negative, reflecting a transition from buyer to seller dominance. Current readings at -0.0182 contrast with the bullish green bars seen earlier in July, now replaced by red bars indicating cooling momentum [1]. Sustained negative BBP values could amplify downward pressure, though analysts caution that short-term volatility remains a factor.

Market observers are closely monitoring the $0.42–$0.45 range as a potential decision point. A strong rebound above $0.45 with substantial volume could pave the way for a retest of the $0.50 level. Conversely, failure to stabilize here may trigger further declines, particularly given the absence of immediate support from historical cycles. Broader market context, such as XRP’s 37% volume decline in July, highlights sector-wide challenges, though XLM’s unique use case and ecosystem differentiation must be considered [2].

The current uncertainty underscores the fragility of momentum-driven assets in a volatile market. Investors are advised to track on-chain metrics, including volume and wallet activity, to gauge the likelihood of a sustained recovery. While forecasts like Marks’ $8.00 target present ambitious scenarios, XLM’s near-term trajectory will depend on its ability to reestablish control over short-term technical levels.

[1] Source: CoinMarketCap (https://coinmarketcap.com/community/articles/68888082fb184a125f70cf98/)

[2] Source: U.Today (https://u.today/xrp-plummets-by-37-unexpected-market-retracement)