Stellar (XLM) Faces Volatility After 68% Rally in July

Key Notes

• XLM has fallen below its 20-day EMA at $0.40, signaling a shift to short-term bearish sentiment.
• Weak price momentum and declining capital inflows suggest the token could drop to $0.36 or even $0.32 if selling continues.
• Despite current bearish conditions, a recovery in buying interest could lift XLM back above its 20-day EMA and toward $0.41.

Stellar’s native cryptocurrency XLM

XLM $0.39

24h volatility: 4.8%

Market cap: $12.20 B

Vol. 24h: $565.73 M

ended July 31 with a strong 68% upside, becoming the 12th largest crypto asset with a market cap of $12.16 billion. XLM also outperformed top players like BTC

BTC $114 937

24h volatility: 2.9%

Market cap: $2.29 T

Vol. 24h: $59.95 B

, ETH

ETH $3 613

24h volatility: 4.9%

Market cap: $434.68 B

Vol. 24h: $37.30 B

, during the strong rally last month.

However, following the rejection at $0.50, XLM price has come under some selling pressure. Historically, August has been a bearish month for the Stellar cryptocurrency.

Stellar (xlm) price faces selling pressure as august begins

Stellar’s native cryptocurrency XLM is down by 8% in the last 24 hours, dropping to $0.38 as of now. In the last two weeks, XLM price is already down by 14% indicating consistent selling pressure.

Looking at XLM’s historical pattern, XLM investors need to maintain caution during the month of August. August has historically been a weak month for crypto, closing in the green only twice, in 2017 and 2021, while posting losses in all other years.

Stellar (XLM) Price Drop in August | Source: CryptoRank

The start of August coincides with weak technical indicators for XLM. This sets the stage for further downside from here.

XLM’s one-day chart shows that the recent double-digit decline has pulled the token’s price below its 20-day Exponential Moving Average (EMA), which now acts as dynamic resistance around $0.40. A break below this level typically signals a shift in short-term market sentiment from bullish to bearish.

Related article: Stellar Party to End Soon? XLM Price Eyes 30% Crash if It Loses This SupportStellar Price Loses 20 EMA | Source: Tradingview

Bear and bull case scenarios for xlm

With weakening demand and its historically poor August performance, XLM price can drop further from the current levels of $0.39. Thus, it would continue on its path of a broader short-term downtrend.

Both price momentum and capital flow indicators are showing bearish signals, reflecting growing negative sentiment. If capital inflows continue to decline, XLM could slip to $0.36. A break below this support level may extend the decline further, potentially pushing the XLM price down to $0.32.

However, if the buyer demand recovers, the Stellar crypto could stage an upside from here. A sustained increase in accumulation could lift XLM back above its 20-day EMA. If the breakout is maintained, the token may retest the $0.41 level, potentially signaling a short-term bullish reversal.

Popular crypto analyst Ali Martinez floated the possibility of a flag-and-pole pattern breakout ahead. If this breakout happens, XLM price could see the next stop at $0.80.

nextDisclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.