Stellar Price Forecast: Correction deepens with bearish signals prevailing

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Stellar (XLM) price is extending its correction, trading below $0.167 at the time of writing on Thursday after being rejected at a key level. The derivatives data shows signs of weakness, with XLM’s short bets rising amid falling Open Interest (OI).

Stellar price extends the correction on Thursday after a rejection at the previously broken trendline.
Derivatives data indicates weakness, as short bets are rising alongside falling open interest.
The technical outlook suggests bears are still in control, aiming for a deeper correction.

XLM’s derivatives data shows bearish bias

CoinGlass’s XLM long-to-short ratio stands at 0.85 on Thursday, nearing the lowest value in a month. This ratio, below one, reflects bearish sentiment in the markets, as more traders are betting on the asset price to fall.

XLM long-to-short ratio chart. Source: Coinglass

In addition, Stellar’s futures OI dropped to $95 million on Thursday, the lowest level since November 2024, and has been steadily falling since the start of this year. This drop in OI reflects waning investor participation and projects a bearish outlook.

XLM open interest chart. Source: Coinglass

Stellar Price Forecast: XLM extends correction after closing below key support

Stellar price declined more than 13% last week, closing below the lower trendline of the falling wedge pattern on Saturday. XLM has been rejected around this broken trendline through Wednesday, extending losses to over 5%. As of Thursday, XLM is trading at $0.169.

If XLM continues its correction, it could extend the drop toward the 2025 yearly low of $0.160, set on October 10.

The Relative Strength Index (RSI) reads 26 on the daily chart, an oversold condition, indicating strong bearish momentum. The Moving Average Convergence Divergence (MACD) also showed a bearish crossover in mid-January, which remains intact with rising red histogram bars below the neutral level, further supporting the negative outlook.