- XLM traded below the 200 Exponential Moving Average (EMA) on the daily time frame.
- XLM price could fall 12% to $0.083 if it closes a daily candle below $0.0915
Stellar (XLM) at the time of writing looked poised for a possible downside move after breaking out of a double price action pattern. This is important, especially since at the moment the general sentiment in the cryptocurrency landscape is bearish. And the major cryptocurrencies have been experiencing significant selling pressure lately.
The double top analysis indicates a bearish outlook
Based on the price action and technical analysis, the double top is a bearish pattern that indicates a potential sharp price decline after the neckline breaks.
In addition to this bearish outlook based on the price action pattern, XLM also traded below the 200 Exponential Moving Average (EMA) daily, indicating that the company is in a downtrend.
Source: TradingView
Due to these factors, there is a good chance that the price of XLM will fall by 12% to $0.083 in the coming days. However, traders should wait for the daily candle to close below $0.0915.
If this happens, it would confirm a successful jam.
Liquidation levels and market sentiment
Currently, the key liquidation levels are around the $0.091 level on the downside and $0.0948 on the upside. This is evident from data from the on-chain analysis company MintGlass.
In fact, this data also indicated that traders at these levels are over-indebted.
Source: CoinGlass
If market sentiment remains unchanged and XLM falls to the $0.091 level, long positions worth almost $280,000 will be liquidated. Conversely, if sentiment changes and the price jumps to the $0.0948 level, short positions worth $170,000 will be liquidated.
On-chain metrics and XLM price analysis
Additionally, CoinGlass’ stock market liquidation map suggested that sellers have been less dominant recently. It also implied that XLM could see a price turnaround despite a crucial downturn.
Here it is worth looking at another on-chain indicator: the OI-weighted funding rate. It is used to monitor market sentiment and helps predict potential upward movements in the price of an asset. According to CoinGlass, XLM’s OI-weighted funding rate is positive, while at the time of writing it had a figure of 0.0019%.
Source: CoinGlass
Given all these metrics and the price action, it is difficult to predict where the price will go in the coming days. However, the outlook could change if XLM closes a daily candle below the $0.0915 level.
At the time of writing, XLM was trading around the $0.0938 level, following a modest 0.2% price decline over the past 24 hours. Meanwhile, Open Interest also fell by 2.3% over the same period, indicating lower interest from traders during the market downturn.