Stellar (XLM) Faces 15% Downside Risk as Bearish Trend Persists

Stellar (XLM) is currently trading around $0.260, just above a critical support zone after facing a strong rejection from the 50-day moving average. The recent price action on the daily chart indicates a gradual decline over the past few weeks, with XLM now dangerously close to multiple key demand levels. Short-term sentiment has weakened, as evidenced by a sharp intraday sell-off on the hourly chart, which pushed XLM price down nearly 6% in a few hours.

The daily Heikin Ashi chart shows a consistent series of red candles since mid-May, indicating that Stellar price has failed to sustain above its 20-day and 50-day Simple Moving Averages (SMAs), currently at $0.27112 and $0.28096 respectively. This rejection suggests that bearish control remains dominant. Additionally, the price has dropped below the 200-day SMA at $0.333, confirming the long-term bearish structure.

Fibonacci extension levels placed below the current price suggest a possible drop to $0.22, aligning with an old consolidation support level from March. Assuming the swing high was near $0.30 and the swing low near $0.25, the 1.618 extension projects a potential drop to $0.22. More conservative Fibonacci supports are seen near $0.24 and $0.22, indicating a potential 15%–20% downside risk from current levels.

On the hourly chart, XLM experienced a steep fall on June 13, forming a series of large red candles that wiped out a previous 3-day accumulation range between $0.27 and $0.28. Post-drop, the price has consolidated sideways around $0.259–$0.260, suggesting it is searching for support. Despite short rebound attempts, the 20, 50, 100, and 200 SMAs are all stacked in bearish order, with the 20-SMA acting as intraday resistance around $0.265. Unless this resistance is flipped, XLM price could revisit the recent low at $0.254. The hourly chart also shows attempted accumulation candles, but without increasing volume or bullish divergence, recovery looks weak.

Reversal chances for Stellar depend entirely on a decisive break above $0.271—the 50-day SMA. If the price closes a daily candle above this level with volume, it could target $0.30 again, representing a 15% upside from the current price. However, failure to reclaim this level will likely trigger further selling toward $0.24 and possibly $0.22, where bulls could try a stronger defense. A simple risk-reward analysis suggests buying at $0.260 with a stop loss at $0.24 (−7.7%) and a target of $0.30 (+15.4%), resulting in a 2:1 risk-reward ratio, but only if momentum shifts bullish, which isn’t yet confirmed.

If bears maintain control and Bitcoin remains under pressure, XLM price could slide toward the $0.22 zone by the end of June, marking a near 15% drop from the current level. Conversely, any positive macro sentiment or altcoin momentum could push Stellar price to reclaim $0.27 and aim for $0.30, especially if a breakout candle emerges on the daily chart with strong follow-through volume. Currently, the trend is bearish both technically and momentum-wise, with no major bullish reversal signals yet confirmed.