Stellar (XLM) continues to trade under the $0.160 level as of Thursday’s session, marking its fifth consecutive day of losses and signaling that downside pressure has yet to ease. The sustained decline reflects weakening bullish momentum, while derivatives data and technical indicators increasingly point to a cautious market environment.
At the time of observation, XLM remains structurally vulnerable as traders appear to reduce risk exposure amid broader market uncertainty.
Derivatives Data Signals Growing Bearish Sentiment
Market positioning in the derivatives sector paints a notably defensive picture for Stellar. The long/short ratio for XLM has fallen to 0.77 — its lowest reading in over a month. A ratio below 1 indicates that short positions outweigh long positions, suggesting that a majority of leveraged traders are positioning for further downside.
This imbalance highlights growing bearish sentiment, as market participants appear to anticipate continued price weakness rather than a near-term recovery.
Adding to the negative outlook, Open Interest (OI) in XLM futures has contracted significantly. OI declined to approximately $87.07 million on Thursday, marking its lowest level since mid-November 2024. This represents a sharp pullback from the January 6 peak of $166.99 million.
A declining OI alongside falling prices typically signals capital outflows and reduced speculative participation. It suggests traders are closing positions rather than building new exposure, reinforcing the narrative of waning momentum and lower conviction in the short term.
Technical Structure Remains Fragile
From a technical perspective, XLM continues to trade below key short-term resistance levels, with momentum indicators tilting bearish. Consecutive lower highs and lower lows reflect a developing downtrend structure.
If selling pressure persists, the $0.136 region may emerge as the next major support zone to watch. A breakdown below interim support levels could accelerate downside volatility. Conversely, a sustained recovery above $0.160 would be required to stabilize sentiment and invalidate immediate bearish pressure.
For now, the combination of declining Open Interest, a bearish long/short ratio, and weakening technical structure suggests that caution remains dominant across the market.
As always, market conditions can shift rapidly depending on liquidity flows and broader crypto sentiment.
This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research before making any financial decisions.
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