XRP and Stellar Lumens Continue Technical Adjustment... Where Does the Subdued Consolidation Range End?

▲ XRP, Stellar (XLM)/AI Generated Image ©

XRP (Ripple) and Stellar Lumens (XLM) continue their downward trend amid deepening mixed sentiment due to a lack of clear directional catalysts. Paradoxically, an analysis suggests that as investor fear reaches its peak, it could signal a short-term bottoming out and a rebound. Short positions betting on a decline are dominant, particularly in the derivatives market, suppressing short-term prices. However, historically, periods when public pessimism was at its highest have often been contrarian investment points that led to price stabilization and rebounds.

According to FXStreet, an investment media outlet, on May 26 (local time), CoinGlass's long/short ratio data analysis showed XRP at 0.80 and XLM at 0.83, with both assets falling to their lowest levels in the past month. A ratio below 1 indicates that significantly more traders have taken short positions, expecting future price declines, which directly proves short-term downward pressure. Furthermore, as of Tuesday, XRP's futures funding rate turned negative, and XLM's funding rate is also gradually moving into negative territory, indicating an ongoing expansion of selling power.

However, the spread of this pessimism can be interpreted as a positive reversal card from the perspective of on-chain data. According to data analysis platform Santiment, the public's Fear, Uncertainty, and Doubt (FUD) indicator observed on social media has reached its highest level in the past three weeks. Experts pointed out that when traders on social media are gripped by excessive fear, most weak individual investors have already dumped their holdings, sharply reducing selling pressure. Past cases also show that prices quickly stabilized or a technical rebound occurred immediately after entering deep FUD territory.

Simultaneously, CryptoQuant's summary data also detects a subtle but optimistic sentiment among XLM investors. Currently, XLM's spot market shows a buyer-dominated state, with buyers gaining control, and other altcoin-related indicators generally remain neutral, accumulating hidden upward energy. As the bearish bias in the derivatives market converges with strong bottom-buying in the spot market, accumulation movements are being observed within the market to secure downside rigidity even amid price declines.

From a technical perspective, XRP's spot price is currently trading around $1.339, having broken away from the lower boundary of the descending parallel channel at $1.391, showing a clear short-term bearish trend. With the price below the 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs), the Relative Strength Index (RSI) hovering around 40, and the Moving Average Convergence Divergence (MACD) trapped in negative territory, downward pressure is intense. Upside, $1.391 and the 50-day EMA at $1.399 serve as the primary resistance levels, and even if these are surpassed, the 100-day EMA ($1.468) and 200-day EMA ($1.672) pose significant hurdles. Downside, if the horizontal support level of $1.300 collapses, the correction phase is expected to deepen further.

Meanwhile, XLM is currently consolidating around $0.148, with the 50-day, 100-day, and 200-day EMAs heavily pressing down from $0.158, $0.168, and $0.197, respectively. While the RSI remains around 42 and the MACD shows negative values, indicating a valid downtrend, a consolidating movement to establish a bottom above the previous pivot zone of $0.148 is unfolding. If XLM gives up even the horizontal support level of $0.143, it could fall to the Fibonacci support level of $0.1362. However, if it reclaims the 50-day EMA ($0.158) and the Fibonacci 23.6% retracement line ($0.164) in succession, backed by spot buying pressure, it could pave the way for a full trend reversal via $0.1787.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*