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Explaining why Stellar’s [XLM] price may be at the risk of a potential 30% dip
Stellar’s native token XLM is currently under attack from the market’s bears, and it appears that the altcoin could drop by as much as 30% in the near future. According to recent technical analysis, XLM has formed a descending triangle price action pattern on the daily timeframe and is breaching its support area for the third time this month. Each time the asset hits this level, the support seems to weaken further.
As per the data from TradingView, if XLM fails to hold onto its current position and closes below the $0.325-level, a significant price drop could ensue. In this scenario, it’s possible that the altcoin may plummet to as low as $0.225 in the future.
On-chain metrics are also indicating a potential selling pressure on the coin. It has been observed that there have been significant inflows of XLM worth $3.9 million into exchanges. This type of activity typically suggests a price decline and presents an ideal opportunity for sellers to act.
Moreover, data from Coinglass reveals that XLM’s Open Interest has dropped by 4.5% in the last 24 hours, indicating traders’ reluctance to build new positions due to market fear. Traders are now over-leveraged at $0.342 on the lower side with $1.25 million worth of long positions built, which could face liquidation if the price falls below this level.
Additionally, short sellers have built $5.65 million worth of short positions anticipating that XLM’s price will not rise beyond $0.373.
Source: ambcrypto.com
