XLM Downturn Looms: MACD Crossover and Negative Sentiment Raise Red Flags

Stellar’s XLM faces increasing downward pressure after a lackluster performance in the past week. 

Technical indicators are flashing warning signs, with a key momentum indicator forming a bearish crossover. This signals weakening buy-side momentum and the potential for an extended decline.

XLM Bears Take Control: Technical and Social Metrics Align for Further Losses

An assessment of the XLM/USD one-day chart reveals that the Moving Average Convergence Divergence (MACD) indicator formed a bearish crossover on July 24.

This occurs when an asset’s MACD line (blue) breaks below the signal line (orange). It happens when short-term momentum weakens and dips below the longer-term trend. It often marks the beginning of a downtrend or a period of sideways consolidation.

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XLM MACD. Source: TradingView

Since the crossover emerged, XLM has mostly traded within a narrow range, facing persistent resistance around $0.44 while finding support at $0.41. This price action reflects a clear loss of bullish momentum and confirms the current period of low trading activity and indecision among market participants. 

The lack of strong directional movement reinforces the bearish outlook for the altcoin, especially if support at $0.40 begins to weaken.

Furthermore, on-chain sentiment around XLM has also turned notably negative, amplifying the likelihood of a continued price slide. According to Santiment, the token’s weighted sentiment stands at -0.179, adding to the bearish pressures on its price.

XLM Weighted Sentiment. Source: Santiment

An asset’s weighted sentiment measures its overall positive or negative bias, considering both the volume of social media mentions and the sentiment expressed in those mentions. 

When it is negative, it is a bearish signal, as investors are increasingly skeptical about the token’s near-term outlook. This prompts them to trade less, exacerbating the price decline.

One Push Could Send It to $0.39 or Trigger a Rebound

XLM trades at $0.43 at press time, down 2% amid the broader market pullback. If negative sentiment strengthens and new demand remains absent, the altcoin could break out of its narrow range and fall to $0.39.

XLM Price Analysis. Source: TradingView

Conversely, a resurgence in bullish sentiment could prevent this from happening. If buying activity resumes, XLM could reverse its current course, break resistance at $0.44, and rally toward $0.45.