Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- A weekly candlestick close below $0.131 could expose XLM to more losses.
- Wavering funding rates and negative Open Interest could favor sellers.
Stellar [XLM] could take a cue from its Q3 2022 price action if the bearish pressure persists. Its extended pullback threatened to crack a key support zone and clear the rest of July’s gains.
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XLM has been consolidating July gains above $0.1250 since mid-July. However, the bearish pressure over the last few weeks has forced an extended retracement to the April (Q2) high of $0.115. If this previous Q2 price ceiling cracks, more losses could be likely.
Bulls out to defend Q2 high as support
The $0.113 – $0.130 (cyan) support zone, bordering the Q2 highs, has been holding sellers from seeking more ground. Although it flashed green after a recent retest on the daily chart, indicating bulls’ intent to safeguard it, the weakening Bitcoin [BTC] was pressing.
A session close below $0.131 on the weekly chart could confirm sellers’ extra leverage. Such a move will put XLM within the Q3 2022 price consolidation range of $0.099 – $0.131. If so, a price rejection at the previous range-high ($0.131) could lower the altcoin to the range-low ($0.099).
Conversely, a move and convincingly close above $0.131 could confirm bullish intent. But such a move could be a pipe dream given a weak BTC in $25k.
Besides, the RSI was in the negative zone despite showing reversal signs. The On Balance Volume (OBV) also declined slightly, reinforcing a dip in demand for the altcoin.
Funding rates fluctuated
According to Coinalyze, there have been significant fluctuations in funding rates since mid-August, tipping the scale in favor of sellers. The cumulative green bars indicate positive funding rates and a bullish cue, while the red bars capture a bearish bias.
How much are 1,10,100 XLMs worth today?
If XLM takes a cue from Q3 2022 price action, shorting XLM at the previous range-high with take-profit at the range-low will be reasonable.
However, more shorts,>$50k, were liquidated in the last 24 hours before the time of writing. It suggests a likely price pivot to the upside, but a weak BTC could complicate matters.