XLM Drops 3%, Tests Key Support Levels

Stellar's XLM token has experienced a significant drop of 3% in recent trading, following a period of recovery that lasted for three weeks. Despite this decline, the price of XLM remains within a buying range and is currently neutral-bullish on the daily timeframe. However, the hourly chart indicates a bearish trend, with the price appearing weak amid rising supply.

The closest level for selling XLM at the moment is $0.32, which served as support in December 2024. The likelihood of this support level breaking is high, given the current technical setup. If this happens, XLM could experience a substantial drop, potentially retesting the $0.162 level that acted as resistance during the November 2024 surge. This could lead to a significant market reset before the price begins to rise again.

To maintain bullish momentum, XLM must stay above the December support level to form a new bullish (double-bottom) pattern before bouncing back. A break above $0.64 could set the stage for another upward move on the daily chart.

If XLM loses the December support at $0.32, the price could sink to a low of $0.27, followed by the $0.189 level. The lower level to consider for a broader correction is $0.115, and it may even test the $0.1 level before resuming buying.

The current drop in XLM was initiated from $0.51. If the bulls push back to reclaim this resistance level, the next line of interest would be $0.63. A cross above this level should set the market up for a new rally to $0.7.

Key resistance levels for XLM are $0.51, $0.63, and $0.7, while key support levels are $0.32, $0.27, and $0.189. The current spot price of XLM is $0.387, with a neutral-bullish trend and low volatility.