Stellar (XLM) is currently navigating a critical technical juncture. After failing to sustain a breakout above a key resistance level, the token is facing increased selling pressure, raising the likelihood of a deeper pullback as it searches for a durable price floor.
A Precarious Technical Position
The recent price action for Stellar has been challenging. The token has been unable to hold gains above the $0.39 to $0.41 resistance band, a critical ceiling that has repeatedly reversed upward attempts. This failure signals that buyers lack the conviction to push the price higher in the current environment.
Technical indicators are reinforcing this cautious outlook. Analysts have observed a failed bullish flag breakout, which is a pattern that typically signals a continuation of an uptrend. Its failure here suggests the broader downtrend that began in mid-July remains intact. Furthermore, a hidden bearish divergence on the daily RSI is forming. This occurs when the price makes a lower high while the momentum indicator makes a higher high, often confirming that the underlying bearish trend is likely to continue.
The Market’s Quiet Struggle
Beyond the charts, other market dynamics are contributing to the fragile setup. Social chatter and trader discussions around XLM have become notably sparse. While short-term sentiment scores might appear high, the actual volume of conversation is low, indicating that optimistic social posts are not translating into tangible buying pressure in the markets.
This lack of sustained interest makes it difficult for bulls to gather the momentum needed to overcome selling pressure. With trading activity dominated by sellers, the order book is tilted toward further downside, increasing the risk of a sharper decline if key support levels are broken.
Key Levels to Watch for XLM’s Next Move
For traders and market watchers, specific price levels are now in focus. The immediate supports to monitor are $0.36 and $0.34. A decisive break below $0.34, which aligns with the late September low, could trigger a more significant correction, with some models suggesting a potential for a 40% retreat in a worst-case scenario where sellers maintain firm control.
On the upside, the path to recovery requires a strong and sustained move. Bulls need to reclaim the $0.39 to $0.41 zone to invalidate the current bearish thesis. A daily close above this band, especially with high volume, would be the first sign of renewed strength and could open the door for a test of higher resistance levels.
