In this market uncertainty, XLM, the native token of Stellar, appears bearish and is poised for a massive price decline. This bearish outlook is further supported by intraday traders, who seem to be strongly betting on short positions, as reported by the on-chain analytics firm CoinGlass.
Traders’ Strong Bets on Short Positions
Today, February 6, 2024, the on-chain metric XLM exchange liquidation map revealed that traders holding long positions are exhausted and currently over-leveraged at the $0.3057 level, with $2.26 million worth of long positions. Meanwhile, traders holding short positions are dominating, as they are over-leveraged at $0.355, with $5.25 million worth of short positions at this level.
However, these millions of dollars worth of positions will be liquidated if market sentiment shifts and the price moves in either direction. This on-chain data clearly shows that there is no power on the bull’s side, and the bears are the ones leading the XLM.
The potential reason behind this negative perception is the bearish price action and the current economic tensions between the United States, Mexico, Canada, and China.
XLM Technical Analysis and Upcoming Level
According to expert technical analysis, XLM has formed a bearish inverted cup and handle price action pattern on the daily time frame and is on the verge of a support or neckline breakdown.
Based on the recent price action, if XLM fails to hold this level or breaches the neckline and closes a daily candle below the $0.32 level, there is a strong possibility it could drop by 40% to reach the $0.20 level in the future.
Despite this bearish price action, the asset is still trading above the 200 Exponential Moving Average (EMA) on the daily time frame, indicating that XLM is in an uptrend.
Current Price Momentum
XLM is currently trading near $0.33 and has experienced a price decline of over 7.50% in the past 24 hours. However, during the same period, its trading volume dropped by 30%, indicating a fear of further price declines.
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