Stellar’s native token, XLM, has been experiencing a decline in price amid market uncertainty, with recent technical analysis pointing to a potential crash. After an impressive rise in early March 2025, XLM has since formed a bearish pattern known as a rising wedge. This has left investors and traders concerned about the token’s future movement. According to experts, XLM’s price could decline by as much as 15%, potentially reaching the $0.23 level if certain support levels fail to hold.

XLM Technical Analysis and Key Levels to Watch

The technical outlook for XLM suggests that the asset is at a critical juncture. Currently trading near the $0.288 level, XLM’s price has been showing signs of weakness. A failure to hold the $0.288 support could signal a steep decline, with the price possibly falling to $0.23 in the near future. This drop would represent a 15% decrease from its current position.

In recent days, XLM’s price action has formed a bearish rising wedge pattern on the four-hour timeframe. This pattern is often seen as a sign of a potential breakdown. XLM initially showed strong upside momentum at the beginning of March but has since reversed course, creating this bearish formation. Moreover, the token is now facing a descending trendline, which has historically marked price reversals, further adding to concerns about a potential downturn.

Another concerning factor is the appearance of a bearish engulfing candlestick pattern, which typically signals a shift in momentum from bullish to bearish. This pattern has pressured XLM’s price lower, reinforcing the negative outlook for the asset.

Current Price Momentum and Market Activity

As of press time, XLM is trading at approximately $0.288, marking a 2% drop in the past 24 hours. While the price has dipped, the trading volume has surged by 25%, indicating that there is an increase in market participation. This heightened activity suggests that traders are actively responding to the current price action, but it’s unclear whether the surge in volume will be enough to reverse the bearish trend.

Bearish On-Chain Metrics and Whale Activity

The bearish sentiment surrounding XLM has been reinforced by several key on-chain metrics. Data from Coinglass shows that over $1.40 million worth of XLM tokens have flowed into exchanges in the past 24 hours. This inflow indicates that long-term holders might be preparing for a sell-off, which could lead to further downward pressure on the token’s price.

In addition to the large inflow of XLM, there is a significant amount of bearish betting activity. Traders have built up positions betting against XLM’s price, with $3.30 million worth of short positions at the $0.305 resistance level and $611K worth of long positions at the $0.286 support level. These over-leveraged positions suggest that a liquidation could be imminent, depending on how the price moves in the coming hours. If XLM fails to hold the $0.288 support, these positions could be liquidated, adding more selling pressure to the market.

What’s Next for XLM?

With bearish technical patterns and concerning on-chain metrics, the outlook for XLM remains uncertain. The price is at a critical support level, and any further decline could send the token to the $0.23 range. However, if XLM manages to hold the $0.288 level and find support, it could avoid a major crash and possibly set the stage for a rebound.

In the coming days, traders will closely monitor XLM’s price action to see whether it can hold the key support or if the bearish patterns will continue to dominate. With whale activity and over-leveraged positions further fueling the potential for a price decline, XLM’s future remains in the hands of the market’s response to these key levels.

As always, traders should proceed with caution and be prepared for volatility, especially with the current uncertainty in the broader crypto market.