Key Insights
- The price of XLM has dropped 11% in a month and is now sitting near a fragile support.
- Social dominance has collapsed nearly 70%, a pattern linked to past corrections.
- A looming “death cross” could push XLM to $0.24 unless bulls retake key levels.
XLM price has been under heavy pressure lately, despite gains in the general market. While Bitcoin and other altcoins rallied in August, Stellar has gone the opposite.
Over the past month, XLM fell 11%, and in just the last 24 hours, it slipped by another 4.2%. This drop has been worse than the market’s overall 2% decline. It is raising questions among traders about whether recovery is possible.
Social Dominance Collapse Shows Weakness
One of the strongest warning signs for Stellar is the decline in its social dominance. This metric tracks how much of the overall crypto discussion is focused on a specific token.
Stellar has seen that number collapse from 1.71% in mid-July to just 0.51% today. That’s nearly a 70% fall in less than two months. History indicates that drops in social dominance tend to come alongside price corrections.
Earlier this year, a similar decline in chatter came before a 30% slide in the XLM price from $0.35 to $0.25. This said, traders are watching closely to see if history repeats itself.
Looming Death Cross Adds to Bearish Case
The technical charts are now reinforcing the bearish picture. According to the 4-hour timeframe, the 50-day Exponential Moving Average (EMA) is about to cross below the 100-day EMA. Traders call this a “death cross,” which has a few historical implications for the asset’s price.
This crossover indicates that short-term strength from the bulls has weakened compared to the longer trend. When it happens during market weakness, it often leads to sharper declines. For Stellar, confirming this crossover would validate the bearish signals from the social dominance.
At the time of writing, the XLM price currently trades at $0.39, just above weak support at $0.38. If this level fails, the next support sits at $0.36. Notably, these supports are clustered tightly, which makes them vulnerable.
When supports are this close together, any strong moves can break through multiple levels simultaneously. If that happens, the price could drop to $0.24. This would mark a correction of nearly 40% from current levels.
Bullish Scenario Still on the Table
Despite the bearish jitters, some analysts believe there is room for a reversal. Chart patterns indicate that the death cross is forming. However, if certain levels hold, an inverse head and shoulders formation could set up a breakout.
Support is nearly $0.36 and is lined up with the 0.618 Fibonacci retracement level. The structure could be completed if the price dips into this zone and holds. A confirmed breakout above $0.50 would open targets at $0.62, $0.82 $0.94, and $1.10.
However, Stellar must reclaim resistance at $0.43–$0.45 for this bullish case to take shape. Without this move, the bears are likely to take control of prices.
Analysts like Ali Martinez believe that the bulls are still in control. However, the bears might have to take control for a while. An analyst on X suggested Stellar may need one final dip to $0.33. After that, a rebound toward the $1 mark is expected.
Indicators Show Mixed Signals
Momentum indicators are painting a more neutral picture. For example, the Relative Strength Index (RSI) is at 44. This means that it is slightly below the midpoint of 50.
This indicates that while momentum is weak, XLM has not yet been oversold. A dip toward 30 would show heavier selling, while a push above 50 could indicate buyers returning.
The MACD reading is also near neutral levels, with values close to zero. This shows consolidation, even though an upward cross could indicate that bearish pressure is easing.
