- Stellar XLM drops sharply as open interest plunges amid heavy selling
- Profit taking hits XLM as crypto liquidations exceed $465 million
- Market sell-off shakes Stellar as traders unwind leveraged positions
Stellar XLM came under sharp pressure as a sudden market sell-off disrupted recent bullish momentum, with the decline unfolding during the Asia session as risk appetite faded across digital assets. Market data showed XLM sliding nearly 5% within 24 hours as traders reduced exposure, a move that closely mirrored XRP losses of almost 6% over the same period.
Liquidation figures confirmed the intensity behind the pullback, with more than $465 million in leveraged crypto positions cleared and long positions accounting for over half. That dynamic marked a reversal from recent sessions dominated by short liquidations, as bullish traders absorbed the bulk of losses when prices failed to extend higher.
Open interest trends revealed deeper shifts in trader positioning, as CoinGlass data showed Stellar’s open interest dropping by 11.79% to about $142.74 million. Such a sharp decline often reflects aggressive profit taking after strong price advances, especially after XLM rallied for several consecutive sessions and drew speculative interest.
Despite the sell-off, derivatives activity across the broader crypto market remains elevated, with global futures open interest holding above $143 billion near a two-month high. Funding rates also remain moderately positive, suggesting bullish expectations have not fully disappeared, although recent price action signals rising caution among short-term traders.
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XLM Price Retreat Follows Failed Breakout Attempt
Price movements during U.S. trading hours reinforced the fragile tone, as earlier gains evaporated and reversed start-of-year optimism. XLM surged from around $0.229 to near $0.254 during the rally, pushing the token above its daily 50 moving average near $0.232. This breakout marked XLM’s first move above that level since October, prompting technical traders to anticipate a potential trend shift.
However, sellers emerged near $0.255 and blocked further upside, forcing prices back toward the same moving average zone. The token briefly tested lows near $0.233 as selling pressure intensified, making this level critical for short-term market direction. Elsewhere, the broader altcoin market weakened during the session, with several tokens posting steeper losses from synchronized risk reduction.
Traders are increasingly focused on protecting gains accumulated earlier this month, hence volatility may persist as positions rebalance. While the open interest decline signals reduced speculation, overall market liquidity remains strong and support defense may shape Stellar’s next move.
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