Stellar Faces Death Cross—But Is a Surprise Rebound Around the Corner?

Stellar (XLM) has entered a bearish phase after confirming a death cross pattern on its daily chart. This occurs when the 50-day moving average crosses below the 200-day moving average, often seen as a warning sign of extended downside pressure.

At its present price point of $0.234 XLM demonstrates more than a 3 percent decline since yesterday’s opening. The asset dropped continuously after reaching its highest point during early December 2024 while demonstrating no ability to start an upward movement.

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Experts in market analysis have determined that the death cross demonstrates wider market instability because both the 50-day and 200-day moving averages show negative trends. The market configuration indicates investors have lost significant optimism about the market which signals an extended bearish period ahead.

Technical indicators display initial indications which challenge the current direction being followed. The Relative Strength Index (RSI) maintains a value of approximately 38 which indicates that the asset has reached the potential threshold for oversold conditions.

Additionally, volume trends do not fully support the idea of a full-blown capitulation. While trading activity has increased slightly during the recent pullback, it has not reached the heightened levels typically seen during major breakdowns.

Key Resistance Levels Could Invalidate Bearish Pattern

Despite the confirmed death cross, technical observers warn against dismissing the potential for a short-term rebound. XLM would need to reclaim the $0.26 and $0.28 resistance zones, which now coincide with the 50-day and 200-day moving averages.

The breakouts above these levels would transform this bearish signal into a bear trap resulting in sentiment reversal and possibly renewed upward movement. Several upcoming trading periods will reveal if the market pattern creates additional price declines or starts moving upward again.

Market participants are advised to monitor momentum and volume closely as XLM approaches critical levels. A shift in either could hint at a broader change in direction.

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