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Stellar (XLM) faces renewed bearish pressure as its price drops over 6% amid technical signals suggesting further declines.
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Investor interest wanes with a notable decrease in trading volume, while broader market corrections weigh heavily on XLM’s momentum.
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According to COINOTAG, the imminent death cross formation on Stellar’s three-hour chart signals a potential extended downtrend for the XRP rival.
Stellar’s price drops 6% with a death cross looming, signaling bearish trends amid declining volume and market corrections impacting XLM.
Death Cross Signals Bearish Momentum for Stellar (XLM)
The emergence of a death cross on Stellar’s three-hour chart serves as a critical technical indicator, often forecasting a sustained downtrend. This pattern occurs when the short-term 9-day moving average crosses below the longer-term 26-day moving average, reflecting weakening price momentum. Currently, this crossover is expected to materialize within the narrow price range of $0.4680 to $0.4684, underscoring the vulnerability of XLM in the near term.
In addition to the death cross, Stellar’s Relative Strength Index (RSI) stands at 74.93, suggesting the asset is marginally overbought but losing upward momentum. The combination of these indicators points to a potential shift in market sentiment, with investors likely to adopt a more cautious stance. Furthermore, the overall crypto market correction continues to exert downward pressure, amplifying the bearish outlook for XLM.
Declining Trading Volume Reflects Reduced Investor Confidence
Trading volume is a crucial metric for gauging market interest and liquidity. Stellar has experienced a significant 12.43% drop in trading volume, now standing at approximately $845.92 million. This decline signals a reduction in active participation from traders and investors, which often precedes price depreciation. Lower volume can exacerbate price volatility and limit the asset’s ability to sustain rallies, further reinforcing the bearish technical signals observed.
Comparative Analysis: Stellar’s Performance Versus XRP
Earlier in July, Stellar showed promising strength by outperforming its close competitor XRP by up to 5%, driven in part by the release of Stellar Core v23.0.0rc2. This update aimed to reduce cross-contact call costs, enhancing network efficiency and briefly boosting XLM’s price by 8%. However, recent market dynamics have reversed this trend, with Stellar’s price now falling 6.45% over the past 24 hours compared to XRP’s more moderate decline of 3.47%.
This divergence highlights the heightened sensitivity of Stellar’s price to broader market fluctuations and technical factors. While both assets face bearish headwinds, Stellar’s sharper decline suggests increased vulnerability, potentially due to weaker investor sentiment or less robust support levels.
Technical Outlook and Market Implications for Investors
For traders and investors, the impending death cross serves as a cautionary signal to reassess exposure to XLM. The combination of declining volume, overbought RSI conditions, and a bearish crossover indicates that further price corrections may be imminent. Market participants should monitor key support levels around $0.4600 and $0.4500, which could provide potential entry points if the downtrend stabilizes.
Moreover, staying informed about upcoming protocol updates or macroeconomic developments is essential, as these factors could influence Stellar’s trajectory. Given the current technical setup, a conservative approach emphasizing risk management is advisable until clearer bullish signals emerge.
Conclusion
Stellar’s recent price decline and the looming death cross highlight a shift toward bearish momentum, compounded by falling trading volumes and broader market corrections. While past gains fueled by network upgrades demonstrated potential, current technical indicators suggest caution for investors. Monitoring key price levels and market developments will be critical for navigating XLM’s near-term outlook effectively.
