Stellar (XLM) Price Drops 6% as Death Cross Signals Prolonged Downtrend Amid Weak Volume and Overbought RSI

Stellar (XLM) is under increasing bearish pressure as its price declines over 6% amid a critical technical signal known as a death cross on its three-hour chart. The formation of this pattern—where the 9-day moving average crosses below the 26-day moving average—typically indicates a prolonged downtrend. Analysts note that the crossover is likely to occur within a narrow price range of $0.4680 to $0.4684, signaling heightened vulnerability for the cryptocurrency. The broader market correction, which has impacted XLM’s momentum, further amplifies concerns about sustained weakness.

Technical indicators reinforce the bearish outlook. The Relative Strength Index (RSI) currently stands at 74.93, suggesting the asset is marginally overbought but showing a loss of upward momentum. This combination of a death cross and a weakening RSI points to a potential shift in market sentiment, with investors likely to adopt a more cautious stance. The crypto market’s ongoing correction has also exacerbated downward pressure, creating a challenging environment for XLM.

Investor interest in Stellar appears to be waning, as evidenced by a notable 12.43% drop in trading volume to approximately $845.92 million. Reduced liquidity often precedes price depreciation, as lower volume can exacerbate volatility and hinder the asset’s ability to sustain rebounds. This decline in participation underscores the lack of confidence among traders and could further solidify the bearish trend.

While Stellar briefly outperformed its rival XRP earlier in July by up to 5%, driven by the release of Stellar Core v23.0.0rc2, recent performance has diverged sharply. Over the past 24 hours, XLM has fallen 6.45% compared to XRP’s more moderate 3.47% decline. This heightened sensitivity to market fluctuations highlights Stellar’s increased vulnerability, potentially due to weaker support levels or a lack of investor optimism compared to its peer.

For market participants, the impending death cross serves as a cautionary signal. Key support levels at $0.4600 and $0.4500 may offer potential entry points if the downtrend stabilizes, but further corrections appear likely in the near term. Traders are advised to monitor these levels closely while avoiding aggressive positions until clearer bullish signals emerge. The current technical setup emphasizes the importance of risk management strategies, particularly as broader market conditions remain uncertain.

Stellar’s recent price action and technical indicators underscore a shift toward bearish momentum. While past protocol upgrades demonstrated the asset’s potential, the current environment—marked by declining volume, overbought RSI readings, and a death cross—suggests caution for investors. Staying attuned to key price levels and developments in the crypto market will be critical for navigating XLM’s trajectory in the coming weeks.