- Stellar’s DeFi TVL fell from $143.35M to $142.48M in August, lagging competitors like Solana and BSC.
- XLM saw five straight days of net outflows despite a 200% spike in buying activity.
- RSI floor at 42.70 suggests sellers are losing steam, but resistance at $0.42–$0.43 remains crucial for a reversal.
- Support at $0.37 is the key downside level, while breaking above $0.39 could signal early recovery momentum.
Stellar Faces Pressure as DeFi Growth Stalls
Stellar (XLM) has struggled to gain momentum, with the token slipping 2.8% over the past week and trading relatively flat in the last 24 hours. Despite posting a 35% gain over the past three months, Stellar’s rally is hitting resistance due to one major factor: weak DeFi adoption.
Also Read: Stellar’s Explosive Growth: Overbought or Just Getting Started?
Data from DefiLlama shows that Stellar’s total value locked (TVL) declined slightly, dropping from $143.35 million on July 31 to $142.48 million by August 27. This stagnation is in stark contrast with platforms like Solana and Binance Smart Chain (BSC), which have recorded significant DeFi growth in the same period.
This sluggish DeFi performance has capped XLM’s upside, even as buying activity among retail traders has increased.
Net Outflows Rise, but Retail Interest Grows
Stellar recorded five consecutive days of net outflows, jumping from $3.38 million on August 23 to $9.85 million on August 27 — a near 200% increase. Despite this, the surge in buying activity suggests retail investors are still cautiously betting on a rebound.
Meanwhile, Stellar’s Real World Assets (RWA) segment has shown more promise. RWA valuations climbed 13% in August, now standing at $510.79 million. If Stellar can leverage this growth, it may help offset its DeFi weakness and provide fresh fuel for XLM’s price.
RSI Hints at Seller Fatigue
Technical analysis provides a mixed picture. The Relative Strength Index (RSI) has repeatedly held its floor at 42.70, signaling that sellers have struggled to push momentum lower.
Between August 19 and 21, RSI formed a higher low while price action recorded a lower low. This bullish divergence triggered a brief upside move, showing that buyers are ready to step in when momentum shifts.
For a sustainable reversal, XLM’s RSI will need to form another higher low even as prices drift lower. This would indicate that sellers are losing strength and that a breakout could follow.
XLM Price Action: Levels to Watch
Currently, Stellar remains locked inside a descending triangle pattern, often viewed as a bearish continuation setup.
- Downside Risk: A breakdown below $0.37 support could trigger deeper losses.
- Upside Potential: First resistance lies at $0.39. A breakout above the $0.42–$0.43 zone would invalidate the bearish setup and potentially set up a stronger rally.
Until then, Stellar’s price action remains at a crossroads — with buyers and sellers battling for control at critical levels.