The cryptocurrency market has seen its fair share of ups and downs in recent weeks, and Stellar (XLM) is currently facing significant pressure. With its price on a downward trajectory and key indicators flashing warning signs, the altcoin is at a critical juncture. The $0.27 support level has become a focal point for traders and analysts alike. If this line fails to hold, Stellar could face a steeper decline in the coming days.

Over the past seven days, Stellar has dropped by more than 11%, slipping from a recent high of $0.334 to around $0.279 at the time of writing. This decline includes a 4.26% loss in just 24 hours, signaling strong bearish momentum. As prices continue to trend downward, the mood among investors has shifted noticeably, and many are beginning to question whether the worst is yet to come.

Crypto analyst Ali Martinez has weighed in on the situation, pointing out that the $0.27 price mark is now a critical support level. According to Martinez, if Stellar falls below this level, the next logical target would be around $0.23. He noted that bearish momentum appears to be building, and the altcoin may struggle to regain its footing unless there’s a clear reversal in market sentiment. This forecast has intensified discussions in the crypto community, with many traders watching closely to see whether XLM can stabilize or if another leg down is on the horizon.

The concern isn’t just about short-term price action. Several on-chain metrics are also suggesting that investor confidence is weakening. For instance, Open Interest—the total number of outstanding contracts in the derivatives market—has been falling consistently over the last six days. This decline, from $49 million to $38 million, indicates that fewer traders are entering new positions, and many are choosing to exit the market altogether. In simple terms, the interest in trading XLM is drying up.

Moreover, funding rates have slipped into negative territory again. A negative funding rate usually means that more traders are betting on the asset’s price falling rather than rising. This reinforces the idea that bearish sentiment is dominating the market, with short sellers taking the lead. When both Open Interest and funding rates decline simultaneously, it often points to a lack of conviction among bullish traders.

Another telling sign is the movement in the Relative Strength Index, or RSI. This indicator, which measures the momentum of price movements, has been falling steadily. Currently, the RSI is hovering around 48, while its moving average is climbing toward 58. This divergence suggests that sellers are gaining strength and that the altcoin is struggling to maintain upward momentum. When RSI trends downward while the moving average increases, it usually points to continued selling pressure.

Adding to the gloomy outlook is the fact that over 82 million XLM tokens have been sold in just the past 24 hours. Data from Coinalyze shows a negative delta of over 15 million XLM, meaning more tokens are being sold than bought. This level of selling activity further emphasizes the dominance of bears in the market and reduces the likelihood of an immediate recovery.

In the short term, Stellar could find temporary support at $0.263. If that level fails, the next stop might be $0.252. While a drop to $0.23 may not happen overnight, it becomes increasingly likely if the current trend continues. However, there is still a sliver of hope for bullish traders. If XLM manages to hold above $0.27 and buying interest returns, the altcoin could avoid a deeper slide and potentially begin a slow recovery.

Ultimately, the coming days will be crucial for Stellar. With so many bearish indicators in play, holding the $0.27 line could be the difference between stabilization and a significant decline. For now, the market remains cautious, and investors are advised to keep a close watch on price movements and trading volume as the situation develops.