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Stellar Faces Increasing Outflows – Is XLM Price at Risk?

2 mins
Updated by Mohammad Shahid
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In Brief

  • Stellar’s 97% price surge in early July is at risk as rising outflows, shown by a declining Chaikin Money Flow (CMF), threaten to erase recent gains.
  • The Relative Strength Index (RSI) remains above 50, suggesting some buying interest, but further outflows could drive XLM to critical support at $0.393.
  • Stellar’s price is currently at $0.426, and a drop below $0.393 could push it to $0.359, but a positive market shift could help XLM regain support above $0.445.
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Stellar’s (XLM) recent price action has faced downward pressure, causing concerns among investors. After a 97% price surge earlier this month, the cryptocurrency is now on the brink of erasing those gains. 

The next few days will depend largely on broader market movements, which will play a pivotal role in determining the recovery of the altcoin.

Stellar Investors Pull Back

The Chaikin Money Flow (CMF) indicator has been showing a sharp decline, currently sitting at a three-week low. This suggests that outflows from Stellar are rising, which is a negative signal for the asset. 

Rising outflows indicate that traders are less confident in Stellar’s short-term prospects, which is impacting the price action. Although the CMF is still in the positive zone, it is dangerously close to crossing into the negative zone.

If CMF slips into this zone, it would signal that outflows are outweighing inflows, which would further push down the price of XLM. 

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XLM CMF
XLM Chaikin Money Flow Chart. Source: TradingView

Despite the bearish trend, there are still some bullish signs in the broader market. The Relative Strength Index (RSI) for Stellar remains above the neutral 50.0 level, suggesting that the bullish momentum has not completely dissipated.

The RSI has even noted a slight uptick, indicating that there is still some buying interest in the market, especially when compared to the broader market cues. The ongoing positive momentum in the broader crypto market could help mitigate some of Stellar’s outflows

XLM RSI
XLM RSI. Source: TradingView

XLM Price Needs A Push

XLM price is currently at $0.426, and it is attempting to hold above the support level of $0.424. The downtrend observed over the past two weeks has threatened to reverse the significant gains made earlier this month.

If outflows continue and selling pressure builds, Stellar’s price could fall to $0.393, a crucial support level. Losing this support could push XLM’s price even lower, potentially reaching $0.359. This would wipe out much of the recent gains, further impacting investor confidence.

XLM Price Analysis.
XLM Price Analysis. Source: TradingView

On the other hand, if broader market conditions remain positive, XLM may find support at $0.393, preventing further declines.

The only way to fully invalidate the bearish thesis is for XLM to reclaim $0.445 as support, although this seems unlikely under the current market conditions.

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Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Aaryamann Shrivastava
Aaryamann Shrivastava is a technical and on-chain analyst at BeInCrypto, where he specializes in market reports on cryptocurrencies from diverse sectors, including Telegram Apps, liquid staking, Layer 1s, meme coins, artificial intelligence (AI), metaverse, internet of things (IoT), Ethereum ecosystem, and Bitcoin. Previously, he conducted market analysis and technical assessments of various altcoins at FXStreet and AMBCrypto, covering all aspects of the crypto industry, including...
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