Crypto Market Liquidations Wipe Out Nearly $500M of Leveraged Positions, 8% Drop Sends Stellar (XLM) to $0.276

The cryptocurrency market has recently been under significant selling pressure, resulting in nearly $495 million in liquidations. Among the affected assets, Stellar (XLM) has seen an 8% drop in the past 24 hours

Crypto traders are facing difficulties as the cryptocurrency market encountered substantial selling pressure in the past 24 hours, wiping out nearly $495 million in market gains and setting the stage for potential difficulties for traders who employed leverage to amplify their returns.

Among the affected assets, Stellar (XLM) dropped 8% as it encountered a crucial resistance level that could decide the near-term future of the asset.

Stellar (XLM)

Stellar (XLM) has been struggling to break through the $0.55 price point, a level that has acted as a formidable barrier since 2018.

Despite several attempts to pierce through this barrier, the cryptocurrency has repeatedly failed to sustain a rally past it, with the resistance presenting a psychological and technical obstacle for traders.

As crypto analyst Ali points out, this longstanding resistance continues to put pressure on the asset, limiting its potential for further price increases.

“A level that has historically stalled #XLM’s price action. $0.55 has been a key resistance since 2018. It’s an area that, when reached, tends to bring a stall in price action.”

When resistance levels like the $0.55 mark are reached, they often create “sell walls” — large amounts of sell orders placed at specific price points.

This can cause the price to stall as traders react to the perceived difficulty in maintaining upward momentum, especially when there is a concentrated level of resistance.

To break through these sell walls, significant market catalysts or strategic accumulation by large holders are typically required. Without these, it is common for price rallies to be capped or reversed.

In December 2024, XLM saw a brief surge but faced a hard sell-off at the $0.55 resistance. Afterward, it entered a period of consolidation, trading within a specific range.

However, by late January 2025, XLM dropped below the 50-day simple moving average (SMA) at $0.351, signaling a downturn.

Since then, XLM has traded between its 50-day and 200-day SMAs, with the current range set at $0.355 and $0.26. This range-bound trading suggests that the cryptocurrency is in a waiting phase, with investors uncertain about the next major move.

Stellar (XLM) 50-day and 200-day SMA on the 4-hour chart

Chart: TradingViewPro

Crypto traders are facing difficulties as the cryptocurrency market encountered substantial selling pressure in the past 24 hours, wiping out nearly $493 million in leveraged positions, according to data from CoinGlass.

The broader cryptocurrency market also saw some sell-off activity, with Bitcoin (BTC) falling below the $86,000 mark. Meanwhile, Ethereum (ETH) dropped 2.95%, trading near $2,128. Other altcoins, such as XRP, Solana (SOL), Dogecoin (DOGE), Cardano (ADA), and Chainlink (LINK), all experienced losses ranging from 4% to 10%.

According to CoinGlass data, these market declines have led to substantial liquidations, with $317 million worth of long (bullish) positions being liquidated, while $154 million of short (bearish) positions were also erased.

This liquidation event underscores the volatility of the market and the role of leveraged traders in magnifying price movements during periods of high uncertainty.

Stellar’s struggle with the $0.55 resistance, combined with the broader market’s bearish momentum, presents a challenging situation for XLM.

However, market observers remain hopeful that if buying pressure picks up, XLM could break through the resistance, setting the stage for a potential rally.

Historically, cryptocurrencies often experience a reversal after such significant sell-offs, and the current low price levels might signal an opportunity for buyers to step in.

Overall, the outlook for Stellar remains mixed. The asset continues to face significant resistance at $0.55, and market liquidations suggest that the short-term pressure may continue.

But if buying activity accelerates and broader market sentiment improves, XLM could potentially find its way above the resistance, setting the stage for a more bullish phase.

Traders will need to closely monitor both the price action of XLM and the broader market to assess the next move for this digital asset.