Stellar XLM Faces $0.55 Resistance Amid Market Sell-Off
The cryptocurrency market has recently been under significant selling pressure, resulting in nearly $495 million in liquidations. Among the affected assets, Stellar (XLM) has seen an 8% drop in the past 24 hours, trading at $0.276. As XLM continues to face a crucial resistance level, the outlook for its near-term future appears uncertain.
For Stellar, the $0.55 price point has been a critical resistance level since 2018, and it has proven to be a formidable barrier. Despite several attempts to break through this level, XLM has repeatedly failed to sustain a rally past it, with the resistance acting as a psychological and technical obstacle for traders. According to crypto analyst Ali, this longstanding resistance continues to pressure the asset, limiting its potential for further price increases. It is a level that has historically stalled XLM’s price action, and traders will be watching to see whether the asset can finally push through.
When resistance levels like the $0.55 mark are reached, they often create sell walls—large amounts of sell orders placed at specific price points. This can cause the price to stall as traders react to the perceived difficulty in maintaining upward momentum. To overcome these sell walls, significant market catalysts or strategic accumulation by large holders are typically required. Without these, it is common for price rallies to be capped or reversed.
In December 2024, XLM saw a brief surge, but the price faced a hard sell-off at the $0.55 resistance. Afterward, it entered a period of consolidation, trading within a specific range. By late January 2025, XLM dropped below the 50-day simple moving average (SMA) at $0.351, signaling a downturn. Since then, XLM has traded between its 50-day and 200-day SMAs, with the current range set at $0.355 and $0.26. This range-bound trading suggests that the cryptocurrency is in a waiting phase, with investors uncertain about the next major move.
The broader cryptocurrency market has also been under pressure, with Bitcoin (BTC) falling below $86,000 and Ethereum (ETH) dropping 2.95% to trade near $2,128. Other altcoins, such as XRP, Solana (SOL), Dogecoin (DOGE), Cardano (ADA), and Chainlink (LINK), all experienced losses ranging from 4% to 10%, contributing to the market-wide sell-off.
According to CoinGlass data, these market declines have led to substantial liquidations, with $493 million in leveraged positions wiped out. Of that total, $317 million worth of long (bullish) positions were liquidated, while $154 million of short (bearish) positions were also erased. This liquidation event underscores the volatility of the market and the role of leveraged traders in magnifying price movements during periods of high uncertainty.
Stellar’s struggle with the $0.55 resistance, combined with the broader market’s bearish momentum, presents a challenging situation for XLM. However, market observers remain hopeful that if buying pressure picks up, XLM could break through the resistance, triggering a potential rally. Historically, cryptocurrencies often experience a reversal after such significant sell-offs, and the current low price levels might signal an opportunity for buyers to step in.
Overall, the outlook for Stellar remains mixed. The asset continues to face significant resistance at $0.55, and market liquidations suggest that the short-term pressure may continue. However, if buying activity accelerates and broader market sentiment improves, XLM could potentially find its way above the resistance, setting the stage for a more bullish phase. Traders will need to closely monitor both the price action of XLM and the broader market to assess the next move for this digital asset.
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