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▲ Stellar (XLM)/ChatGPT generated image ©
Stellar (XLM) plummeted nearly 9% in a single day, falling to the $0.17 level. Following the rejection of the CLARITY Act, a U.S. cryptocurrency market structure bill, in a Senate procedural vote, risk-averse sentiment spread across the broader cryptocurrency market. This, combined with an exodus of funds from altcoins, failure to break through key resistance levels, and sell-offs accompanied by increased trading volume, led to an amplified decline.
According to CoinMarketCap, a cryptocurrency market data aggregator, on September 15 (local time), Stellar recorded an 8.97% drop over 24 hours, trading at $0.176. During the same period, the total cryptocurrency market capitalization decreased by 4.22%, and Bitcoin (BTC) fell by 4.07%. Regulatory uncertainty re-emerged as the U.S. Senate failed to secure the 60 votes needed for a cloture vote to advance the CLARITY Act, and XLM also faced strong downward pressure amidst the market-wide risk-off trend.
The outflow of funds from altcoins, in particular, further amplified Stellar's decline. The Altcoin Season Index dropped by 10.81%, indicating that funds are exiting higher-risk altcoins. Amidst macroeconomic pressures such as rising Treasury yields and oil prices, XLM recorded a decline more than twice that of Bitcoin. The regulatory uncertainty stemming from the CLARITY Act's rejection and the overall market's risk aversion appear to have pressured Stellar's weakness.
Technical factors also amplified the selling pressure. XLM turned bearish after failing to hold the key resistance zone of $0.192-$0.196, and its 24-hour trading volume surged by 38.7% to $438.9 million. The significant increase in trading volume coinciding with the price drop confirmed strong selling pressure. Analysts suggest that as key technical price levels collapsed amid the overall market downturn, further selling ensued.
In the short term, $0.175 is considered a critical defense line. The 200-day Simple Moving Average (SMA) is located at this price level. If XLM holds $0.175 and reclaims $0.185, there is a possibility of short-term price stability. However, if it falls below $0.175, there is a risk of further decline to $0.167, which is the 78.6% Fibonacci retracement level. Nevertheless, it is still up 12.31% over the last 30 days.
Ultimately, Stellar's short-term trajectory depends on whether the market's investment sentiment, which worsened after the CLARITY Act's rejection, stabilizes. It is crucial for Bitcoin to find stability above $75,000 and for the altcoin fund outflow to ease. For XLM itself, the key points to watch are whether it holds $0.175 support and changes in trading volume. If selling volume decreases and the support line is defended, there could be room for a rebound, but if $0.175 breaks, further selling pressure is likely to continue.
*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.*
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