Stellar (XLM) price is showing slight signs of recovery (up 2.8% in 7 days). However, the broader trend remains bearish. Over the past three months, XLM has fallen nearly 29%, and despite a brief rally, it has struggled to gain traction.
Traders are currently focusing on one important level. This level could determine whether this rebound develops into a full recovery or fades into another leg descent.
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Bearish divergence returns as social buzz peaks
Despite the project showing strong on-chain growth and increasing conversation across social platforms, its charts continue to show signs of weakness.
The Relative Strength Index (RSI), which measures buy and sell strength, shows a hidden bearish divergence. This is a setup that often appears when momentum weakens during a short-term rally.
From October 20th to 25th, XLM made new lows and RSI made new highs. This indicates that although the price is slowly increasing, it is losing its upward momentum.
This could be due to widespread selling pressure continuing to weigh on buyers. A similar setup appeared between September 13th and October 6th, followed by a sharp 32% correction. Traders are keeping a close eye on further declines as the same divergence is forming again.
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Interestingly, the market story looks very different off the charts. Stellar’s tokenized real-world assets (RWA) value, or the total value of real-world assets on the network, rose 26.51% in 30 days to $638.8 million.
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This growth sharply increased October’s social dominance. This indicator increased from 0.648% to 0.794% in the past 24 hours.
This means more people are talking about Stella, but data shows they aren’t actively buyingetc. The disconnect between attention and action reflects the gap between fundamentals and XLM’s price performance.
Bearish pattern keeps XLM price below $0.38
On the daily chart, XLM is still stuck in a descending channel, and every move up generates a new selloff. The bearish structure confirms that the bears still have the upper hand and the short-term rally has not yet changed the overall trend.
For XLM price to show strength, it will need to breakout cleanly above the channel’s upper limit at $0.38. This could lead to an upside of at least 20% from current levels and a reversal in near-term sentiment from bearish to neutral to bullish.
A further break above $0.41 (a key zone that has thwarted Stellar’s several upward attempts since September) would confirm a possible trend reversal.
On the downside, support is located near $0.30. If it cannot hold, the token could be dragged towards the next strong demand zone at $0.23.
