Key Takeaways
Stellar breaks below bearish flag and targets $0.378 as Futures CVD shows strong sell-side dominance, while negative Funding Rates and rising long liquidations confirm mounting bearish momentum.
Stellar [XLM] recently broke down from a bearish flag pattern, signaling growing downside pressure across the market.
Analyst projections now highlight $0.378 as the next key level, showing that sellers have regained momentum after weeks of consolidation.
At the time of writing, Stellar traded at $0.4075 after dropping more than 5% in the past 24 hours.
This renewed selling pressure is now testing investor conviction as broader sentiment continues to deteriorate.
The breakdown coincides with heavy sell orders and increased volatility in derivatives markets, confirming that bears currently control short-term momentum.
Why does XLM Futures CVD signal?
Futures Cumulative Volume Delta (CVD) reveals persistent taker sell dominance, which shows that traders are aggressively hitting the sell side of the order book.
This indicator reflects strong pressure from market participants closing long exposure and favoring bearish positioning.
Therefore, the consistent sell volume highlights a significant shift in trading behavior, weakening any potential recovery attempts.
The sustained CVD decline emphasizes that downward momentum is not merely technical but supported by futures market flows.
Consequently, buyers face increasing difficulty in regaining short-term control as sellers dictate price direction with consistent force.
XLM: Bearish outlook adds weight
Funding Rates on Binance and other exchanges have flipped negative at 0.009%, signaling traders’ willingness to pay funding to hold short positions.
Sustained negative rates reveal that sentiment has shifted firmly in favor of downside speculation.
This bearish tilt confirms growing conviction among derivatives traders that Stellar’s decline has more room to extend lower.
However, extremely negative Funding Rates can sometimes trigger short squeezes, although current levels remain within a moderate range.
For now, the persistence of these negative values reflects broader market caution, adding further weight to the bearish case in the short term.
What does sentiment reveal after the July surge?
Weighted Sentiment for Stellar showed a sharp spike in mid-July, which briefly lifted optimism to its highest level in months.
However, sentiment has since collapsed into negative territory at -0.266, reflecting disappointment among traders and holders as bearish signals grow stronger.
This decline demonstrates that enthusiasm from earlier rallies has faded, leaving confidence fragile.
Therefore, the psychological backdrop now aligns with technical weakness, making it difficult for bulls to rebuild momentum.
Overall, weak sentiment suggests that market participants expect further declines rather than a swift rebound, reinforcing the cautious narrative around Stellar.
Long liquidations intensify Stellar’s decline
Liquidation data highlights a notable imbalance between long and short positions, with long liquidations dominating recent sessions.
This means leveraged traders betting on the upside have been forced out, further pressuring prices.
At one point, liquidations against longs exceeded $700,000 compared to minimal short losses at only $1.62k.
Therefore, the impact of liquidation cascades has amplified downward moves, intensifying selling momentum in a fragile market environment.
The trend confirms that traders holding bullish bets are increasingly vulnerable, while bearish positions remain resilient.
Consequently, liquidations continue to serve as a reinforcing mechanism for Stellar’s current downturn.
Will Stellar slide toward $0.378?
Stellar faces mounting bearish signals, with Futures sell dominance, negative Funding Rates, weak sentiment, and long liquidations aligning against bulls.
Therefore, the technical breakdown from the flag pattern appears well-supported by on-chain and derivatives data.
Unless buying volume emerges strongly, the probability of Stellar extending losses toward $0.378 remains high.
