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Selling pressure on Stellar Lumens (XLM) has suppressed the rise defense of the $0.11 support level. Buyers had maintained the support level from late September to early October. However, the downward trend that caused Bitcoin to lose its $27,000 support level in the past three days has also affected XLM.
The Downtrend of XLM May Persist
The downward trend at the support level in the popular altcoin may prolong XLM’s downtrend market structure. The Chaikin Money Flow (CMF) indicator revealed a decrease in capital inflows into XLM. The indicator has been in the negative zone since September 21 and was still in the negative zone at the time of writing. This situation provided an advantage for sellers to prolong the downward trend, causing the bulls’ slow defense of the $0.11 support level.
With the shift of the Relative Strength Index (RSI) into the oversold zone, buyers weakened further, indicating a lack of buying pressure. With a price trading at $0.1 at the time of writing, the short-term target for sellers could be the $0.09 price range. However, sellers may need to scale another support level at $0.096 to reach this price level.
Support Level in XLM
On the other hand, bulls could look at the $0.096 support for a strong price recovery. This price level has provided XLM with its biggest gain this year and could also be part of the weekly uptrend order block between $0.094 and $0.109. Speculators’ activity in the futures market indicated that the downward trend in XLM could continue in the short and medium term. Open interest continued to decline along with the price, highlighting the possibility of further price drops in the coming days.
Similarly, spot CVD experienced a sharp decline, revealing a significant lack of demand for XLM. This could further pressure the market on lower timeframes, as sellers continue to exert more pressure while buyers attempt to reverse the losses.