Technical Breakdown and Social Sentiment
Stellar’s price action has been quite deceptive lately. On the surface, things look stable with XLM holding relatively flat over recent weeks and showing decent three-month gains. But when you dig deeper, the technical picture tells a different story.
The bullish flag pattern that many were watching has essentially failed. Instead of breaking upward as expected, XLM broke below the support trendline. That’s not what you want to see if you’re hoping for a sustained upward move. The daily RSI is also showing what technical analysts call a hidden bearish divergence – the price makes lower highs while the RSI makes higher highs. This often signals that the underlying downtrend remains intact.
I think what’s interesting here is that this broader downtrend started back in mid-July when XLM fell from around $0.52 to $0.34. That’s about a 35% drop, and the price hasn’t really managed to convincingly break out of that pattern since then.
Social Activity and Market Interest
Social metrics paint a similar picture of weakness. Stellar’s social dominance, which measures how often XLM gets mentioned in crypto discussions, has fallen significantly from its July peak. It went from 1.72% in mid-July down to just 0.16% by early October – that’s the second-lowest level in three months.
There was a brief bounce to 0.36%, but that’s still well below previous highs. The overall pattern shows lower highs forming, which suggests Stellar is falling out of focus among traders. This muted social chatter aligns with what Wyckoff volume analysis shows about buyer and seller control.
When social activity briefly picked up, we saw some blue “buyer control” bars appear, indicating short bursts of buying. But those have already started thinning out again. If they flip back to seller control colors like we saw in mid-August and late September, XLM could face another significant drop.
Price Levels to Watch
Looking at key price levels, if Stellar falls below $0.37, the next important support sits at $0.34, which matches the late September low. A clean break below that level could extend the decline further.
On the flip side, if XLM can reclaim $0.39 and then push through $0.41, that would invalidate the current bearish outlook and show renewed buyer strength. But given the failed pattern and weakening momentum signals, the path of least resistance appears to be downward for now.
What’s notable is that even with the ETF buzz – Galaxy Digital included XLM among 12 tokens they think might qualify for fast-track ETF approval – the social traction and buying pressure remain soft. This suggests the market’s interest in Stellar hasn’t really picked up despite the potential catalyst.
Perhaps the broader crypto market conditions are weighing more heavily than any individual token news. Or maybe traders are waiting for clearer signals before committing to positions. Either way, the combination of technical breakdown and fading social interest creates a challenging environment for XLM bulls in the near term.
