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Stellar's [XLM] potential plunge to $0.378 following a bearish price breakaway?

Cryptocurrency XLM has experienced a breakdown from a bearish flag formation, suggesting mounting bearish pressure within the market.

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2025 September 4 . 8:45 AM

2 min read

Stellar's XLM potential decline to $0.378 following a bearish breakdown?

Stellar's [XLM] potential plunge to $0.378 following a bearish price breakaway?

In the cryptocurrency market, Stellar (XLM) is currently experiencing a downturn, with the digital asset trading at $0.4075 after a 5% drop over the past 24 hours. This slide towards lower prices is driven by a combination of technical and market factors that indicate selling pressure and weak sentiment.

The technical breakdown from the flag pattern for Stellar appears to be well-supported by on-chain and derivatives data. Recently, XLM broke below a bearish flag pattern, indicating growing downside momentum and a potential continuation of the downtrend towards the $0.378 support level.

The bearish technical pattern breakdown is further reinforced by strong sell-side dominance in futures markets. The Futures Cumulative Volume Delta (CVD) shows persistent taker sell dominance, meaning traders are aggressively hitting sell orders. This reflects strong pressure from participants closing long positions and betting on a decline.

Negative funding rates on derivatives exchanges, such as Binance, contribute to this bearish outlook. Negative funding rates imply that short sellers are dominant and that holding long positions can be costly. Additionally, increased liquidation of long positions adds to downside pressure.

The weighted sentiment for Stellar has collapsed into negative territory at -0.266, reflecting disappointment among traders and holders. This dampens buying interest and supports falling prices, as indicated by the Fear and Greed Index, which shows overall investor sentiment for XLM as negative or neutral.

Analyst projections now highlight $0.378 as the next key level for Stellar. If the price fails to hold this level, it could lead to further declines. Some analysts note if XLM drops below $0.33, its price could worsen significantly.

It's important to note that, like other cryptocurrencies, XLM’s price is sensitive to macroeconomic developments, regulatory environment changes (especially in the US and EU), and general crypto market sentiment—all of which contribute to volatility and downside risks.

In summary, bearish technical breakdowns, futures market sell dominance, negative funding rates, and weak sentiment are the main factors contributing to the potential slide of Stellar towards $0.378. Unless buying volume emerges strongly, the probability of Stellar extending losses towards this level remains high. Traders should exercise caution and closely monitor market developments.