📉 XLM Rally Loses Steam
Stellar Lumens (XLM) surged 80% last week but has dropped 16% from its YTD high, now at $0.43. This pullback comes as the broader crypto market's bullish momentum fades, putting XLM at risk of a deeper correction.
⚠️ Mean Reversion Threat Looms
XLM’s price is far above its 50-day ($0.29) and 100-day ($0.28) moving averages. Historically, such deviations lead to mean reversion, where price moves back toward these averages. A 40% decline to these levels is possible if the correction deepens.
📊 Break-and-Retest Pattern Developing
After breaking out of a descending channel, XLM often retests former resistance. This classic break-and-retest pattern suggests a drop before any new rally. The bullish outlook is invalidated only if XLM breaks above its YTD high of $0.5155.
📉 Open Interest and Stablecoin Data Concerns
Futures Open Interest has fallen from $520M to $495M, a typical sign that momentum is cooling. Meanwhile, claims of Stellar’s stablecoin boom were misleading. A big chunk of last week's supposed surge was actually a data reclassification of the Franklin Onchain Money Market Fund. Excluding that, Stellar’s stablecoin supply sits at $185M—far less impressive.
✅ Bottom Line
XLM is at risk of a 40% correction to align with its moving averages. Traders should watch for further declines, especially if the price fails to hold above key support zones.
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