Stellar XLM Dives 10.84% Amid Oversold Conditions, Key Support at $0.40 in Focus

Stellar (XLM) has experienced a sharp correction, plunging 10.84% in the last 24 hours to trade at $0.4168 as of the latest data [1]. This decline follows a 12% rally over seven days and a golden cross formation, which initially signaled a potential bullish trend. However, the recent drop has pushed XLM below critical technical levels, including the 23.6% Fibonacci retracement at $0.44 and the 30-day EMA near $0.41. The price now trades beneath the lower Bollinger Band, with the RSI indicator at 28.14, entering the oversold territory [2]. Analysts highlight that while oversold conditions can sometimes indicate a short-term rebound, the current context of broad market pressure and increased liquidations complicates this dynamic.

On-chain metrics reveal heightened volatility, particularly between July 11–17, when both long and short positions saw surges in liquidations. The latest data from CoinGlass shows over $79.8 million in long positions at risk near the $0.40 zone, compared to $42.1 million in short positions [3]. This imbalance suggests aggressive bearish activity, exacerbated by a 11.63% decline in open interest. Traders are increasingly reducing exposure, a trend often associated with market uncertainty. The key resistance levels to watch are $0.44 and $0.47, which bulls must reclaim to reverse the downtrend. Conversely, a break below $0.40 could accelerate the price toward the 61.8% Fibonacci retracement at $0.3171, representing a deeper correction.

The immediate outlook for XLM hinges on the ability of buyers to defend the $0.40 support level. Historical patterns indicate that sustained pressure below this threshold could trigger further liquidations and drive the price toward $0.33. However, technical indicators such as the RSI being in oversold territory offer a potential floor, suggesting that a short-term rebound might materialize if the broader market stabilizes. For long-term investors, the focus remains on macroeconomic factors and the project’s fundamentals, including ongoing developments in stablecoin adoption, which previously fueled this month’s rally.

The FAQs section in the original report underscores three critical questions for investors: Why is the price falling? Is XLM oversold? And what lies ahead? The answers point to a combination of technical breakdowns, market-wide selling, and leveraged positions being liquidated as the primary drivers. With the RSI confirming an oversold condition, the path forward remains uncertain. Traders should monitor whether the $0.40 level holds or succumbs to bearish momentum, as either scenario could define the asset’s trajectory in the near term.

Source: [1] [title1Stellar XLM Price on the Verge of a Breakdown, Should You Sell or Hold?] [url1https://coinpedia.org/price-analysis/stellar-xlm-price-on-the-verge-of-a-breakdown-should-you-sell-or-hold/] [2] [title2Stellar XLM Price on the Verge of a Breakdown, Should You Sell or Hold?] [url2https://coinpedia.org/price-analysis/stellar-xlm-price-on-the-verge-of-a-breakdown-should-you-sell-or-hold/] [3] [title3Stellar XLM Price on the Verge of a Breakdown, Should You Sell or Hold?] [url3https://coinpedia.org/price-analysis/stellar-xlm-price-on-the-verge-of-a-breakdown-should-you-sell-or-hold/]