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Stellar (XLM) is trading below the $0.22 level at the time of writing on Wednesday, after failing to break above and secure a daily close above a key resistance zone earlier this week. The rejection at this level has triggered renewed selling pressure, with bearish momentum strengthening across both spot and derivatives markets.
From a technical perspective, XLM’s current price structure remains fragile, increasing the probability of a deeper corrective move, with the next major support levels located below the $0.20 mark.
XLM Derivatives Data Signals Bearish Market Sentiment
Derivatives market data for Stellar continues to paint a negative picture for near-term price action. According to Coinglass, XLM futures Open Interest (OI) dropped to approximately $30.30 million on Wednesday, hovering near its lowest level of the year.
This decline in OI suggests a clear reduction in trader participation and risk appetite, often interpreted as a lack of confidence in a bullish recovery. In many cases, falling OI during price weakness reinforces the bearish scenario, as capital exits the market rather than positioning for a rebound.
In parallel, Coinglass data shows that the long/short ratio for XLM stands at 0.91, marking its highest reading in over a month. While this indicates a slight increase in long positioning compared to previous weeks, the ratio remains below the neutral level of 1, confirming that short positions still dominate overall market exposure.
This imbalance highlights that traders continue to favor downside continuation, expecting further price depreciation rather than an immediate trend reversal.
Technical Outlook: Risk of Further Decline Below $0.20
Technically, XLM’s failure to reclaim the $0.22 resistance has reinforced a bearish market structure. Momentum indicators suggest that sellers remain in control, while the lack of strong buying volume limits the potential for a sustained recovery.
If selling pressure persists, XLM could retest psychological support near $0.20, and a decisive breakdown below this zone may expose the asset to deeper downside levels, increasing volatility and liquidation risk for leveraged long positions.
Conversely, any short-term relief bounce would likely face strong resistance near the $0.22–$0.23 region, which now acts as a key supply zone.
Conclusion
In summary, Stellar (XLM) is currently under significant bearish pressure, driven by weakening derivatives metrics, declining open interest, and a technically fragile price structure. While minor rebounds remain possible, the broader market data suggests that downside risks still outweigh upside potential in the near term, especially if support below $0.20 comes into focus.
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