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- Stellar Lumens has a strong bearish sentiment and momentum in the lower timeframes
- A continued drop in Bitcoin prices would cause further panic in the crypto markets
Stellar Lumens [XLM] fell from $0.12 to $0.1115 in 48 hours. During the same time, Bitcoin [BTC] also fell by 4% in value. However, both XLM and BTC are retesting a zone of demand at press time.
Read Stellar Lumens’ [XLM] Price Prediction 2023-24
The market structure and momentum of Stellar Lumens have been bearish since late July, but the price chart showed the formation of a range over the past two months. The losses of the past few hours took XLM to the lows of this range. Can the bulls defend it once more?
The volume indicator shows massive capital outflow from the XLM market
Source: XLM/USDT on TradingView
The aforementioned range extended from $0.111 to $0.1334. Stellar Lumens traded within this range since 20 August. The four-hour chart showed the market structure was firmly bearish and the Relative Strength Index (RSI) reflected intense bearish momentum with a reading of 25.
The Chaikin Money Flow (CMF) also took a dive lower and its reading of -0.3 signified sizeable amounts of money leaving the market and underlined selling pressure. The high trading volume of recent hours was another sign that bearish sentiment was overwhelming.
Yet, the $0.111 level is month-long support for XLM. It represented a good buying opportunity with low risk and high reward, as a bounce from this level would likely reach the range highs at $0.133, representing gains close to 20%.
The surge in spot buying was a surprise
Source: Coinalyze
CMF, the volume indicator shown on the price chart noted high selling pressure in recent hours. Yet the data from Coinalyze contradicted this and showed a large amount of buying volume in the spot market. This was evidenced by the large spike in the spot CVD.
How much are 1, 10, or 100 XLM worth today?
However, the Open Interest (OI) revealed the market sentiment was strongly bearish as the OI climbed higher alongside falling prices. It denoted short sellers dominated the market and if the trend continues, XLM bulls might be unable to defend the $0.11 support.