The XLM price is currently trading at $0.249, reflecting a 7% decline in intraday trading. This downturn witnessed is compounded in XLM crypto by a bearish crossover that has been in place since early June.
Since mid-May, XLM price has dropped over 25%, despite its price hovering near the upper boundary of a falling wedge pattern.
Recently, it lost its crucial support level at $0.26, and bearish momentum has intensified, as ongoing geopolitical tension has left many investors on the sidelines.
Therefore, the ultra-fast network, known for settling transactions in just 3-5 seconds and its native token’s price, both now faces uncertainty. Now the question remains, will XLM price breakout?. To find answers, keep reading to know more.
Why On-chain Metrics Are Turning Green?
Recent social content indicate a shift in sentiment from XLM. As negative messages have been largely overshadowed by positive ones this week, reflecting a bullish bias in the overall emotional tone of people.
This trend is reflected in data fetched on Santiment, which shows that the total weighted sentiment for XLM has risen from -0.775 to +0.192 this week. Especially, on June 17th, positive sentiment reached 11.31, significantly outpacing the negative sentiment of 0.81. This is signaling a notable increase in positive conversations.
In addition to this, the derivatives market for Stellar (XLM) has seen a notable increase in Open Interest weighted funding rates, indicating a recovery over the past week.
Funding rates, which were around -0.378% on May 13th, have now climbed to +0.0029%.The trend has shifted due to positive developments, such as efforts to integrate PayPal’s PYUSD stablecoin into Steller’s network to support small and medium businesses with affordable cross-border payments facilities, and a hint of an upcoming collaboration with EasyA. However, these factors have not translated into significant gains for the XLM price.
As a reason why, the growth in metrics doesn’t align much with the bearish price action on XLM; however, the traders’ bias is clearly shifting towards upside direction slowly, and it is in clear need of a catalyst to boost price.
Overall, the development suggests that investors in the derivatives market are bullish on price recovery.
In What Case Could XLM Price Turn Bullish?
The XLM liquidation heatmap indicates that the price is currently positioned near the bottom side of liquidity. A further breach southwards could trigger a long squeeze, that can potentially drive XLM price to significant lows.
However, there are signs that geopolitical tensions may be on a path to ease soon, particularly with Trump’s ultimatum to Iran.
If Iran complies and surrenders, markets that have been under pressure for so long could experience a reversal with a peaceful breath, especially concerning the Israel-Iran conflict.
Similarly, the outcome of today’s FOMC meeting could be crucial in determining the direction for both top coins and altcoins.
If the situation leans towards the optimistic side, XLM may find support and begin to rise from the liquidity cluster around $0.25. This potential shift could provide the momentum needed for a price recovery.
