- Stellar (XLM) trades at $0.170 under bearish pressure from rising short positions and negative funding rates.
- Early signs in momentum indicators suggest a potential recovery if XLM breaks above key resistance levels.
Stellar (XLM) continues to face mixed market sentiment, trading at $0.170 on Tuesday after failing to break above its descending trendline. Despite the pressure from rising short positions and negative funding rates, technical indicators hint at a potential rebound if key resistance levels are overcome.
Bears Dominate Derivatives Market
Data from CoinGlass highlights a bearish bias in XLM’s derivatives market. The OI-Weighted Funding Rate turned negative on Tuesday, standing at -0.0050%, signaling that traders holding short positions are paying longs. This suggests that market participants currently expect further downside for Stellar.
The long-to-short ratio for XLM also reads 0.96, below the neutral level of 1, reinforcing the view that more traders are betting on a price decline. Such metrics indicate that bearish sentiment is currently influencing trader behavior, keeping upward momentum in check.
Signs of Recovery in Momentum Indicators
Despite these bearish signals, Stellar shows early signs of potential recovery. The Relative Strength Index (RSI) has rebounded to 42 from oversold levels last week, moving toward the neutral mark of 50. A sustained climb above 50 could signal a stronger bullish turn.
The Moving Average Convergence Divergence (MACD) also displayed a bullish crossover over the weekend, further supporting a possible rebound. If Stellar can break and close above the descending trendline, the next target could be the 50-day Exponential Moving Average (EMA) at $0.194.
Balanced Spot and Futures Markets
Activity in the spot and futures markets remains largely neutral, reflecting trader indecision. However, the presence of large whale orders in futures suggests cautious optimism, hinting that significant investors may be preparing for a potential recovery.
Key Levels to Watch
Traders should keep an eye on the descending trendline, as a breakout above it could trigger a recovery rally toward $0.194. Conversely, failure to regain momentum could see XLM testing the February 6 low of $0.136, extending the ongoing correction.
In conclusion, Stellar’s price action is caught between bearish derivatives sentiment and early signs of bullish momentum. While the market remains cautious, breaking above key resistance levels could open the door for a meaningful recovery.
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