XLM faces a risk of sharp decline as the chain plummets, dragging the price to April's bottom

Stellar (XLM) extends its losing streak to the seventh consecutive session, losing more than 1% as of Tuesday. The cryptocurrency, often seen as a direct competitor to Ripple (XRP), is showing clear signs of weakening demand from retail investors, as short positions on the XLM derivatives market continue to increase. From a technical perspective, selling pressure remains dominant, pushing XLM close to the April lows and increasing the risk of breaking the key psychological support level at $0.2000.

XLM Derivatives Market Signals a Downward Trend

Data from CoinGlass shows that the XLM futures market is weakening significantly as open interest (OI) drops to $118.43 million, considerably lower than the $124.72 million recorded on Monday. This development reflects a narrowing of the nominal value of XLM futures — meaning the total value of all open positions, including leveraged longs and shorts — indicating that speculative capital is gradually withdrawing from the market.

Unsettled XLM Futures Contract Volume | Source: CoinGlassIn the context of declining investor risk appetite, selling pressure has become overwhelming as the total value of long (Long) positions liquidated in the past 24 hours reached $406,740, many times higher than the $6,040 in short (Short) liquidations. The strong wave of long position liquidations quickly shifted the market balance, giving the bears the upper hand. This is clearly reflected in the Long/Short ratio, with short positions increasing to 53.37% on Tuesday from 50.57% in the previous 24 hours, reinforcing the bearish signal dominating the XLM derivatives market.

XLM Derivatives Data | Source: CoinGlass## Stellar’s Plunge Threatens Key Psychological Support Level

Stellar continues its decline, closing Monday’s session at $0.2205 — the lowest since early 2025. Persistent selling pressure is pushing XLM toward an important support zone around $0.2001, coinciding with the bottom established on April 7.

In a negative scenario, if this cross-border payment token breaks below the aforementioned support, the price is likely to retreat further to the Pivot S2 level at $0.1642, before facing a critical test at the year’s bottom around $0.1600.

Daily XLM/USDT Chart | Source: TradingViewFrom a technical standpoint, downside risks remain dominant as momentum indicators on the daily timeframe all signal weakening. The RSI is currently oscillating around 33, approaching oversold territory, while the MACD continues to widen its downward momentum after crossing below the signal line — indicating that the bearish trend has yet to show signs of reversal.

Conversely, if XLM experiences a strong technical rebound, the current bearish structure could be challenged, opening the way for the price to retest the $0.2579 zone. This is the intraday low on November 5, which has repeatedly served as a significant barrier to recovery efforts in late November and early December.