XLM Price Analysis: XLM Could Drop by 35% to Reach the $0.189 Mark

With the ongoing market decline, XLM, the native token of Stellar, has turned bearish and is poised for a significant price drop.

The price of XLM is experiencing a downturn, and technical analysis suggests that it could drop further. Here's an analysis of the recent price action and market sentiment.

Currently, XLM is trading at a loss of over 10% in the past 24 hours and is priced at $0.297. However, during the same period, its trading volume surged by 120%, indicating a high level of participation from traders and investors compared to the previous day.

This surge in trading volume could be attributed to the shift in market sentiment and the bearish outlook for XLM.

As highlighted by an expert technical analysis, XLM appears bearish as it has broken through the crucial support level of $0.311, which the asset tested multiple times in recent days. Moreover, it closed a daily candle below this level, partially confirming that the price is poised to continue its decline.

With this breakdown and candle closing, there is a strong possibility that the asset could drop by 35% to reach the $0.189 mark in the coming days. During this price drop, XLM may find temporary support at the $0.25 mark before reaching $0.189.

Despite the breakdown of the crucial support, XLM's price is still trading above the 200 Exponential Moving Average (EMA) on the daily timeframe, which currently acts as a support level. If the asset breaches the 200 EMA and falls below it, there is a high possibility that XLM’s price will continue declining smoothly to that level in the coming days.

According to on-chain analytics firm Coinglass, the sentiment has completely shifted as intraday traders are strongly backing short positions, as evident from the recent price drop.

Data from the XLM exchange liquidation map shows that bears, or traders betting on short positions, are currently dominating the asset. Meanwhile, with the recent price drop, traders betting on long positions seem to be getting exhausted.

Based on recent data, $0.3321 is a level where traders betting on short positions are over-leveraged, holding $6.75 million worth of short positions. On the other hand, $0.2821 is another level where traders betting on long positions are over-leveraged, holding $1.10 million worth of long positions.

This liquidation data and over-leveraged positions indicate that bears are currently dominating the asset and could push XLM’s price toward the $0.189 level soon.