Stellar Traders’ Uncertainty May Intensify XLM Price Downtrend Below $0.40

Stellar (XLM) has shifted momentum today, moving from a bullish stance into bearish territory. At press time, the altcoin is trading near $0.409, reflecting growing caution among market participants. 

This weakness stems from both overall market conditions and the uncertain behavior of traders attempting to time short-term moves.

Stellar Traders Are Unsure

XLM traders have displayed heightened uncertainty over the past week. This indecision is reflected in the funding rate, which has switched from positive to negative before turning positive again. Such swings suggest investors are struggling to establish a firm outlook for the asset, increasing volatility around its price.

The repeated shifts highlight how traders are attempting to capitalize on sudden bursts of momentum. Instead of long-term conviction, speculation dominates the market for XLM. This trend often leaves the altcoin vulnerable to erratic movements.

XLM Funding Rate. Source: Coinglass

From a technical perspective, XLM’s momentum is leaning bearish. The Moving Average Convergence Divergence (MACD) indicator has confirmed a bearish crossover, signaling growing downside pressure. The crossover reflects weakening strength among buyers and indicates a market environment increasingly favorable for sellers.

Additionally, the histogram is showing rising red bars, further confirming bearish momentum. These signals underline mounting selling activity, which could drive the altcoin lower in the short term. 

XLM MACD. Source:  TradingView

XLM Price Is Facing A Decline

At the time of writing, Stellar trades at $0.409 and faces a risk of slipping lower. Technical factors point to a potential drop toward $0.393 support, a level that may determine whether bearish control continues to strengthen in the coming sessions.

Adding to the concern, the Parabolic SAR indicator is positioned above candlesticks, acting as resistance. This placement confirms a downtrend, suggesting XLM could face additional declines. If bearish sentiment dominates, the cryptocurrency might even test deeper support near $0.359, worsening investor confidence further.

XLM Price Analysis. Source:  TradingView

However, if traders shift toward a bullish stance, Stellar has recovery potential. Reclaiming $0.424 as support could allow XLM to climb toward $0.445. Achieving this move would negate the bearish outlook, signaling renewed strength and stabilizing the asset after recent declines.