The death cross forms with the 9-day DSMA crossing below the 21-day DSMA, confirming a bearish shift.
Since peaking at a local high of $0.33 two weeks ago, Stellar [XLM] has suffered significant losses, dropping to $0.28.
Indeed, the daily drop of 1.67% accompanied by weakness in the derivatives market raised new concerns about demand.
As a result, trading volume sharply declined by 62.7% to $97 million, while open interest decreased by 6.6%, reaching a low of $160 million.
Naturally, this sharp decline indicates a decrease in participation from both speculators and investors.
Source: Martinez X
Analyst Ali Charts pointed out this structural weakness and warned of a potential collapse.
According to him, XLM may exit an upward channel, which is typically a bearish signal indicating trend exhaustion.
Source: Coinaz
Moreover, spot markets have reinforced the bearish tone.
Seller dominance is evident in the spot market, where XLM sellers sold 21.95 million tokens compared to 21.64 million tokens bought by buyers, resulting in a negative delta of 313.2 thousand tokens.
This indicates strong selling pressure. Martinez noted that this bearish trend could lead to a drop in the altcoin's price to $0.26.
According to Yasmin's analysis, XLM has shown a "death cross" on the daily chart.
Source: TradingView
The 9-day DSMA fell below the 21-day DSMA, which is often a reliable short-term bearish catalyst.
With current market prices stabilizing below both moving averages, the bearish momentum may continue unless the market regains a price above $0.291.
Therefore, if the current selling pressure in the market continues, further enhancing the bearish pressure, the altcoin will find the next support at $0.2653.
To invalidate this bearish trend, XLM needs to close daily above $0.29. If the bulls fail to push the altcoin above this level, we may see further losses from XLM.
