The price of Stellar (XLM) has hit its lowest level of the month - What will happen next?

Stellar (XLM) is trading at its lowest level in a month, falling 14% over the past 30 days and 5% in the last 24 hours after the Israel-Iran conflict escalated. The recent decline has pushed some technical indicators into bearish zone, with prices hovering near key support levels.

The Death Cross has formed and the rising ADX indicates that the bearish momentum is still under control, while the RSI shows a slight recovery from the oversold condition. With shaky sentiment and XLM under pressure, the coming days will play a crucial role in determining whether a breakdown or a reversal will occur.

Stellar RSI recovers slightly but remains near the oversold zone

Stellar's (RSI) relative strength index is now at 32.63, recovering slightly from yesterday's 26.93 but still well below the level of 69.20 just two days earlier. The sharp volatility reflects a rapid shift in market sentiment, with XLM moving from near overbought to oversold in less than 48 hours.

The recovery from below 30 indicates that some buyers have returned, but the overall trend and momentum remain quite weak.

The RSI of XLM | Source: TradingViewThe RSI is a momentum indicator that measures the speed and change of price movements on a scale of 0 to 100. Values above 70 typically indicate that an asset is overbought and may soon correct, while values below 30 suggest that it is in a bearish zone and may be preparing for a recovery. With the RSI of XLM currently hovering just above the oversold threshold, this signals that selling pressure has eased slightly, but buyers have not yet fully regained control.

If the RSI continues to rise and exceeds the level of 40, it could be an early sign of a trend reversal, but traders still need to be cautious at this time.

ADX of XLM increases while the downward momentum remains under control

The Directional Movement Index (DMI) of Stellar shows that the ADX is at 30.46, up from the threshold of 24 earlier today and nearing the threshold of 30.5 that it maintained for the previous two days. This indicates that the strength of the current trend, whether bullish or bearish, is also strengthening again after the momentum weakened. +DI, tracking buying pressure, is at 14.37, up from 11.88 but still much lower than the level of 31.63 two days ago.

Meanwhile, -DI, measuring bearish pressure, is around 32.37, down from yesterday's 39.67 but still much higher than the 9.2 recorded two days ago.

XLM DMI | Source: TradingView The ADX measures the strength of a trend, with values above 25 often indicating a strong trend. The increasing gap between -DI and +DI signals that bearish momentum still dominates, even though the intensity of this pressure has slightly decreased. With -DI above +DI and ADX rising, Stellar seems to be in a strong bearish trend, although the slight increase in +DI may suggest the earliest signs that buyers are beginning to participate.

Unless the bullish momentum increases significantly, XLM may still face pressure in the short term.

Death Cross puts pressure on price

The EMA lines of Stellar have recently formed a death cross, a bearish signal that occurs when the short-term moving average crosses below the long-term moving average. XLM is currently trading near $0.26, and if the downtrend continues, it may test the key support level of $0.252. Failing to hold this level will pull the price below $0.25 for the first time since April 20, reinforcing bearish momentum.

This technical setup reflects the pressure that XLM is facing after several weeks of weakening momentum.

XLM Price Analysis | Source: TradingViewHowever, indicators such as RSI and DMI suggest that the worst may be over. If buying demand increases and the price surpasses the resistance level $0.276, XLM could aim for $0.285 and $0.293.

In a stronger uptrend, the next target will be $0.31, although this requires trading volume to grow continuously.

Vincent