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The crypto market reversed course in the early Monday trading session after Sunday's rise, with nearly all major cryptocurrencies, including Stellar ($XLM), trading in the red. Bitcoin rose toward its all-time high mark, reaching $107,137 early Monday. The lead crypto asset rose above $106,000 on Sunday for the first time since January, while other top coins showed even larger daily gains.
Stellar ($XLM) also benefited from the rise, reaching highs of $0.297 on Sunday after a four-day dip, before falling further early Monday.
The market action early Monday caught bulls and bears off guard. The unexpected price fluctuation wiped out over $465 million in long positions and $203 million in shorts, totaling $669 million across various crypto assets, per CoinGlass data.
At press time, Stellar ($XLM) was down 3.49% in the last 24 hours to $0.2814 and 10.87% weekly. Stellar's 24-hour trading volume is increasing as traders seek to profit from market volatility, up 88.83% to $270 million per CoinMarketCap data.
$XLM faces short-term risk
As the cryptocurrency market experiences selling pressure, Stellar ($XLM) is approaching a major support test, with the next move potentially decisive.
According to crypto analyst Ali, $XLM must hold the $0.27 level to avoid a steeper correction. A break below this key support could trigger a potential 14% decline, dragging the price down to around $0.23.
"Stellar ($XLM) needs to hold $0.27 to avoid a 14% correction to $0.23," Ali warned in a recent post on X.
Now trading at $0.281, $XLM touched intraday lows of $0.276 in the early Monday session, indicating that bulls are actively defending the $0.27 range to forestall further drops. If this is sustained, $XLM might aim to retest the daily SMA 200 at $0.323 ahead of the May 12 high of $0.334.
On the other hand, further selling pressure might target a drop toward the $0.266 level at the daily SMA 50 ahead of the $0.23 level.