XLM Price Analysis: Death Cross Looms as Stellar Faces Support Test

The XLM price has been under pressure in recent sessions, slipping toward the $0.40 mark. Technical indicators suggest weakening momentum as sellers dominate, with a Stellar XLM EMA crossover flashing bearish signals. 

The much-feared XLM death cross has formed, raising the risk of further downside. However, liquidation data and historical trading patterns hint at one possible lifeline: a potential XLM short squeeze.

EMA Crossover Warns of Bearish Trend

On the 4-hour chart, the 50 EMA has crossed below the 100 EMA, a setup commonly referred to as the death cross. 

This is a strong bearish signal, often associated with deeper corrections as momentum shifts decisively toward sellers.

Adding to the weakness, the price now trades below the 20, 50, 100, and 200-period EMAs, confirming that XLM is locked in a short-term downtrend. Unless bulls reclaim the $0.42–$0.44 zone, the bearish bias remains dominant.

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XLM Support Levels to Watch

The immediate XLM support level sits at $0.40. If this key floor breaks, the next downside target could be around $0.36, a level that aligns with historical demand zones and Bollinger Band support.

However, if buyers defend $0.40 and push XLM back above $0.42, the bearish structure would weaken, opening the door for renewed bullish momentum.

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Short Squeeze: The Only Bullish Trigger?

While technicals lean bearish, liquidation data suggests a possible imbalance. With short positions heavily outweighing longs in recent sessions, a sudden upward push could force short traders to cover, igniting an XLM short squeeze.

This scenario could quickly drive XLM back toward $0.44, invalidating the bearish crossover in the short term. 

For now, though, this remains a low-probability but high-impact outcome.

Chart Analysis (4H XLM/USDT)

• Bollinger Bands: Price is hugging the lower band, signaling oversold conditions. A bounce toward the median line (~$0.42) is possible.

• MACD: Momentum is bearish but shows signs of flattening, suggesting weakening selling pressure.

• RSI: Currently below 40, indicating oversold territory where reversals often occur.

Together, these indicators point to near-term weakness but also highlight that XLM may be approaching exhaustion for sellers.

Read Also: XLM Price Correction Coming Soon? Here's the Explanation

Conclusion

The XLM price is at a critical juncture, with a bearish death cross reinforcing downside risk while support at $0.40 remains pivotal. A breakdown could send XLM toward $0.36, but a surprise short squeeze may be the wildcard that triggers recovery. 

Traders should watch closely whether Stellar can reclaim the $0.42–$0.44 zone to invalidate the bearish trend.

For more in-depth crypto market updates and predictions, check out the latest posts on the Bitrue blog — or explore trading directly on Bitrue’s platform.

FAQ

What is the current XLM trend?

XLM is in a short-term bearish trend, with price trading below key moving averages.

What is the XLM death cross?

It occurs when the 50 EMA crosses below the 100 EMA, signaling bearish momentum.

Where are the key XLM support levels?

Immediate support is at $0.40, with $0.36 as the next downside target.

Could XLM experience a short squeeze?

Yes, heavy short positioning raises the risk of a squeeze if the price rebounds suddenly.

What would invalidate the bearish outlook?

A sustained move above $0.42–$0.44 would weaken the bearish setup and signal recovery potential.