Stellar (XLM) enters May 2025 in a fragile position, having underperformed Bitcoin and other altcoins in terms of price movement and trading volume. Despite following Bitcoin's general path, XLM has failed to achieve the same highs, even though it participated fully in market corrections.
Trading volume has also decreased from its earlier highs this year, highlighting reduced market interest and liquidity. With the price above the main support level and the possibility of a death cross on the horizon, Stellar faces a critical month that could determine its short-term direction.
XLM lags behind Bitcoin due to volatility
Over the past month, Stellar has closely followed Bitcoin's path but with significantly weaker upward performance. While Bitcoin's price has risen over 14%, XLM has only managed to achieve a gain of 2.8%, lagging behind BTC and other altcoins like Hedera, which showed stronger bullish reactions.
This modest increase indicates a lack of conviction among traders and raises questions about Stellar's momentum in the current market cycle. More concerning is that XLM continues to behave like a typical altcoin during corrections, declining more than Bitcoin when the market pulls back.
Overall, altcoins are expected to amplify Bitcoin's movements in both directions: outperforming during rallies and underperforming during declines. However, Stellar shows only negative volatility without benefiting from the rise.
This imbalance makes the token vulnerable, indicating weak market sentiment and potentially limiting its appeal in a risk-laden environment.
Collapse of star trading volume
Stellar has seen a noticeable decline in trading volume over the past thirty days, peaking at just $311 million on April 23. This is far below its previous highs of $480 million on April 7 and $930 million on March 3, indicating a clear downward trend in market share.
A decline in volume often indicates weak trader interest and can limit price momentum, especially in a token that is not already achieving the desired performance. More importantly, current XLM volume levels pale in comparison to activity earlier this year.
Daily trading volume often exceeded $1 billion in January and February, even reaching over $2 billion. This level of liquidity contributed to driving price movements and volatility to stronger levels.
With current figures at a fraction of those peaks, Stellar faces a market backdrop lacking energy and conviction, which may limit any significant near-term upside.
My star is in critical support while the death cross looms on the horizon
Stellar hovers above the main support level at $0.26, an area that could dictate its next major move. EMA lines have become more constricted, and a death cross is likely to form as short-term EMA lines cross below long-term EMA lines.
If support at $0.26 is lost and a death cross is confirmed, XLM could slide further towards $0.239 and even $0.20, indicating a deeper bearish reversal. Conversely, bullish momentum may return if Stellar's price can rebound and break resistance at $0.297.
A breakout above this level could open the door to a reach of $0.349 and $0.375, with additional upside potential towards $0.44 and even $0.495 if volume and sentiment improve.
