Stellar (XLM) is at a pivotal technical juncture, testing a critical supply wall at $0.261 after a recent 7% daily price surge. This level has historically acted as a strong resistance, capping multiple upside attempts in recent months. A decisive breakout above $0.261 could signal a short-term trend shift and propel XLM towards liquidity clusters identified around $0.2683.
However, the bullish momentum faces a fresh challenge from broader market headwinds. During the Asia session on Wednesday, the wider crypto market succumbed to selling pressure, with XLM falling nearly 5%. This decline triggered a significant 11.79% drop in XLM's open interest (OI), which fell to $142.74 million, suggesting a wave of profit-taking following the token's recent rally.
The market context reveals a clash of signals. On one hand, derivative data showed a strong bullish bias with the Long/Short Ratio at 2.769, indicating buyers' dominance. On the other, the broader market saw over $465 million in liquidations in 24 hours, with long positions accounting for over half. XLM's price action is now attempting to hold the daily 50-day moving average (MA 50) near $0.232 as support, a level it surpassed for the first time since October during its recent surge from $0.229 to $0.254.
The immediate future for XLM hinges on whether it can overcome the $0.261 resistance. Success could lead to a continued bullish run targeting overhead liquidity. Failure, however, could result in increased volatility as leveraged positions adjust, especially given the sharp drop in open interest reflecting decreased market commitment.
