The momentum of Stellar (XLM) has shifted today from a bullish stance to a bearish zone. At the time of publication, the altcoin is trading near $0.409, reflecting increasing caution among market participants.
This weakness stems from both general market conditions and the uncertain behavior of traders trying to time short-term moves.
Stellar traders are uncertain
XLM traders have shown increasing uncertainty over the past week. This hesitation is reflected in the funding rate, which shifted from positive to negative before turning positive again. These fluctuations indicate that investors are struggling to establish a consistent outlook for the asset, increasing volatility around its price.
The repeated shifts highlight how traders are attempting to capitalize on sudden bursts of momentum. Instead of long-term conviction, speculation dominates the XLM market. This trend often leaves the altcoin vulnerable to erratic moves.
From a technical perspective, the momentum of XLM tends to decline. The Moving Average Convergence Divergence (MACD) indicator confirmed a bearish crossover, indicating increased downward pressure. The crossover reflects weakness in the strength between buyers and indicates a market environment that is becoming more favorable for sellers.
Additionally, the chart shows increasing red bars, confirming further downward momentum. These signals affirm heightened selling activity, which could drive the altcoin down in the short term.
XLM price faces a decline
At the time of writing, Stellar is trading at $0.409 and is at risk of slipping downward. Technical factors indicate a potential decline towards support at $0.393, a level that may determine whether bearish control will continue to strengthen in the coming sessions.
It raises concern that the Parabolic SAR indicator is positioned above the candles, acting as resistance. This position confirms the downward trend, suggesting that XLM may face further declines. If bearish sentiment dominates, the cryptocurrency could even test deeper support near $0.359, further deteriorating investor confidence.
However, if traders shift towards a bullish stance, Stellar has the potential to recover. Regaining $0.424 as support could allow XLM to rise towards $0.445. Achieving this move would negate the bearish outlook, indicating renewed strength and stability of the asset following recent declines.