- Stellar (XLM) has triggered its first death cross of the year after a 16% weekly drop, signaling a potential bearish trend amid a broader crypto market sell-off.
- While a rebound to higher resistance levels is possible, failure to sustain the recovery could see XLM retest support at $0.20 or even drop to $0.10.
Stellar (XLM) has flashed its first major bearish signal of the year, sending alarm bells across the crypto market. The token’s 16% weekly drop, paired with a rare and ominous technical pattern known as the death cross, has traders on edge, questioning whether this marks the start of a prolonged downtrend or just a short-lived stumble.
What Is a Death Cross and Why Does It Matter?
A death cross happens when an asset’s 50-day simple moving average (SMA) crosses below its 200-day SMA. This crossover is considered one of the most reliable technical indicators of a bearish trend, often signaling that momentum has shifted in favor of sellers. For Stellar, this marks the first death cross since mid-2024, making it a significant event in the token’s price history.
The bearish crossover comes amid a broader market sell-off. Major cryptocurrencies, including Bitcoin, Ethereum, and XRP, have also seen sharp declines in recent sessions, as investor sentiment weakens under the weight of macroeconomic uncertainty and a wave of liquidations.
Price Action and Potential Scenarios
At the time of writing, Stellar is trading around $0.23 — down over 6% in the past 24 hours and 16% for the week. The drop briefly sent XLM as low as $0.20 before a modest recovery. Technical indicators, such as the Relative Strength Index (RSI), suggest that XLM entered oversold territory before rebounding to $0.239. This sharp RSI bounce hints at a potential relief rally.
If buying pressure continues, XLM could push toward key resistance levels at its 50-day and 200-day moving averages — currently near $0.284 and $0.287. A break above these levels would open the door for further upside, with $0.375 and $0.443 as possible next targets.
However, if the bounce loses steam and prices turn lower again, XLM might revisit support at $0.20. A deeper correction could even drag the token down to $0.10 — a level not seen in a long time.
What’s Next for Stellar?
The death cross is a cautionary sign, but not a guarantee of a prolonged bear market. Traders should watch closely for confirmation signals in the coming days. Whether XLM breaks down or rallies, the next moves will be critical in defining its midterm direction.
As always, market participants are urged to do their own research and manage risks carefully in this volatile environment.
About the Author
