XLM at Risk of 40% Price Drop, Pattern Sparks Sell-Off Warnings
Amid this uncertainty in the market, the local token of Stars XLM appears to be bearish and ready to fall. As reported by chain analysis company Coinglass, this bearish outlook has been further supported by day traders.
Traders’ strong bets on short positions
Today, February 6, 2024, Chain metrics The XLM Exchange clearing map shows that traders holding long positions are currently leveraging at a price of $0.3057 and are worth $2.26 million in length. Meanwhile, traders holding short positions dominate leverage because they have a leverage of $0.355 and short positions on this level are worth $5.25 million.
However, if market sentiment shifts and price shifts, millions of dollars worth of positions will be liquidated. The data on this chain clearly shows that there is no strength on one side of the bull, and that the bear is the bear leading the XLM.
The underlying reason behind this negative view is bearish price action and current Economic tensions Between the United States, Mexico, Canada and China.
XLM Technical Analysis and Upcoming Levels
According to expert technical analysis, XLM forms bearish cups in the daily time range and handles price action patterns and is on the verge of support or collar collapse.
According to recent price action, if XLM fails to maintain this level or violates the neckline and closes daily candles below $0.32, there is a high probability that it will drop 40% to reach the future $0.20 level.
Despite this bearish price action, the asset is still trading above the 200 Index Moving Average (EMA) over the daily timeframe, indicating that XLM is on an uptrend.
Current price motivation
XLM is currently trading close to $0.33, down more than 7.50% over the past 24 hours. However, during the same period, its trading volume fell by 30%, indicating concerns about price declines.
