Stellar (XLM) faces the risk of falling another 15% as demand weakens.

Stellar (XLM) has broken down below a descending parallel channel after two consecutive days of being in the red, amidst the appearance of a “death cross” on the daily chart. The Electronic Money, which is a competitor of XRP, is facing the risk of further weakening as demand from retail investors sharply declines, while veteran analyst Peter Brandt also warns of the possibility of continued decline in the near future.

Analyst Loses Faith in Stellar

Stellar is gradually losing its appeal to retail investors as the entire cryptocurrency market continues to face prolonged downward pressure.

According to data from CoinGlass, the open contract (OI) — the total nominal value of open XLM futures contracts — has steadily decreased, down to 118.98 million USD on Wednesday, the lowest level since mid-April.

This development reflects the reality of capital flowing out of the market: traders are reducing leverage usage or being forced to close positions due to liquidation, leading to a decrease in the value of XLM futures contracts.

Open contract of XLM | Source: CoinGlass## Peter Brandt warns of the possibility of a deeper correction

Veteran market analyst Peter Brandt has just released his observation on the descending triangle pattern on the daily chart, following the breakdown of a larger triangle that occurred in early October.

Although Brandt did not specify a specific price target, he emphasized that the downward pressure is increasing, as the ADX (Average Directional Index) — a measure of trend strength — has risen to 37 at the time he published his analysis.

Source: X## The price target after the breakdown of Stellar's channel is 0.2200 USD

As of the time of writing this article on Wednesday, XLM is trading around 0.2700 USD, recording a slight increase of more than 1% for the day, after two consecutive sessions of decline. This recovery comes right after XLM broke down from the descending parallel channel on the daily chart, while also raising the risk of a deeper correction towards the support zone of 0.2200 USD.

XLM/USDT daily chart | Source: TradingViewIn the technical context, the 50-day EMA has crossed below the 200-day EMA on Monday, forming a “death cross” — a warning signal that a strong downtrend may be forming. The momentum indicators on the daily frame continue to reinforce the negative outlook: RSI is at 30, reflecting strong selling pressure, while MACD continues to decline below the signal line, indicating that selling pressure is still increasing.

However, the opportunity for recovery still exists. If XLM breaks through the peak on June 11 at 0.2851 USD, this coin could extend its upward momentum towards the important psychological level of 0.3000 USD, bringing positive expectations for investors.

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