Stellar’s funding rate remains in negative territory, suggesting bearish positioning could extend XLM’s decline toward the $0.15 level.
XLM fell below key technical levels, breaking past the 50-day and 100-day EMAs and the 61.8% Fibonacci retracement zone.
Stellar’s network activity surged in June, with stablecoin supply and tokenized assets showing steady month-over-month growth.
The price of Stellar Lumens (XLM) declined to a significant support level at $0.2175 this week, marking a 35% drop from its May peak. The token is also dropping by 62% from its peak, to be realized in the year 2024. The fall is against a background of a negative funding rate staying constant, and it is an indication that a bearish mood is still prevalent in the market.
Data shows the funding rate for XLM fell to its lowest level since June 30. It has stayed negative on most days since May. A negative funding rate indicates more traders are holding short positions and are paying fees to those holding long positions. This trend typically reflects expectations of further downside. If the $0.2175 support breaks, XLM could drop as low as $0.15, suggesting a potential 36% loss.
Technical Indicators Confirm Weak Price Structure
Technical analysis of XLM reveals that the token broke below key moving averages, including the 50-day and 100-day Exponential Moving Averages. The price also fell under the 61.8 percent Fibonacci retracement level, a level often viewed as a possible rebound point. The descending triangle pattern seen in the daily chart is considered a bearish continuation pattern, pointing to a likely breakdown if support fails.
Despite the bearish trend in price, on-chain data indicates steady network growth. According to Artemis, the number of operations on the Stellar network reached 197 million in June. At the same time, the supply of stablecoins on the network hit a record high of $667 million. The tokenization of real-world assets on Stellar has also grown, with a total value locked now standing at $487 million.
Active Usage on the Rise Despite Market Pressure
Nansen reported an 11% increase in network transactions over the last seven days, totaling 18.2 million.
The active addresses increased by 10% to 146,700 in the same period. Such numbers indicate an increasing discrepancy between the network performance and the market cap of the Stellar tokenization.
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