- On-chain metrics revealed that exchanges have witnessed an outflow of $7.10 million worth of XLM.
- XLM traders have built $3.42 million in short positions at $0.306.
Amid market uncertainty, Stellar [XLM], has turned bearish and is poised for a massive price drop in the coming days.
On the 25th of February 2025, XLM recorded a 14% decline, failing to hold the crucial $0.31 support level, which has a strong history of price reversals.
With this significant price drop in the past 24 hours, XLM was trading near the $0.279 level.
During the same period, its trading volume surged by 85%, indicating heightened participation from traders and investors compared to previous days.
Stellar: Price action and upcoming level
According to AMBCrypto’s technical analysis, XLM appears bearish after breaching its crucial support level of $0.31. Closing a daily candle below this level partially confirms the bearish outlook.
Following the support breakdown and bearish confirmation, there is a strong possibility that XLM could decline by 32% to reach the $0.19 level in the coming days.
Source: TradingView
The asset reinforces its bearish price action by breaching the support of the 200 Exponential Moving Average (EMA) on the daily timeframe.
$7 million worth of XLM outflow
Despite the overall bearish market sentiment and XLM’s continuous price decline, investors and long-term holders have been accumulating the token. This observation comes from on-chain analytics firm Coinglass.
Data from spot inflow/outflow reveals that exchanges have witnessed an outflow of $7.10 million worth of XLM in the past 48 hours.
Such outflows during a weak market sentiment can create buying pressure and drive further upward price momentum.
Source: Coinglass
Traders’ $3.50 million short bet
However, intraday traders are taking advantage of the current market sentiment by betting in the same direction as XLM’s price movement, which is on the short side.
Data from Coinglass revealed that traders betting on short positions are currently dominating. Those betting on long positions appear to be exhausted.
At press time, traders betting on the long side are overleveraged at $0.272. They believe the price won’t fall below this level and have built $802.5K worth of long positions.
Source: Coinglass
Meanwhile, traders betting on the short side are overleveraged at $0.306. They believe XLM’s price won’t rise above this level and have built $3.42 million worth of short positions.
Combining these on-chain metrics with technical analysis, it appears that long-term holders and investors are taking advantage of the recent price drop. They might be executing a “buy the dip” strategy.
Meanwhile, XLM traders seem to be following market sentiment, using leveraged positions to bet significantly on the short side.
