Mixed market signals leave XLM at key technical levels

Key takeaways

Stellar (XLM) is trading lower as bullish momentum fades.
Derivatives data shows bearish positioning, with long-to-short ratios below 1 
Positive funding rates indicate traders are still willing to maintain long positions despite the pullback.

Stellar (XLM) remains under pressure on Tuesday as the coin extends its recent pullbacks.

Although prices have weakened, derivatives and on-chain metrics suggest investor sentiment has not turned decisively bearish. 

Instead, market participants appear cautiously optimistic, with traders balancing expectations for a potential recovery against continued short-term weakness.

Derivatives data shows mixed sentiment

Recent derivatives metrics present conflicting signals for the digital asset. According to CoinGlass, XLM’s long-to-short ratio stands at 0.84, also near a one-month low.

A ratio below 1 indicates that short positions outnumber long positions, suggesting traders are increasingly betting on further downside.

However, funding rates tell a different story. XLM’s funding rates read 0.0058%, indicating that the bulls are still paying the bears. 

Positive funding rates mean traders holding long positions are paying those holding shorts, indicating that bullish positioning still outweighs bearish conviction among leveraged participants.

The divergence between positioning and funding suggests many investors remain cautiously optimistic despite the recent correction.

Stellar technical outlook: XLM holds above key support

Stellar continues to trade above its short-term moving averages, preserving a modest bullish bias despite recent weakness.

XLM is currently trading near $0.193, holding above the 50-day EMA at $0.1922 and the 100-day EMA at $0.1872

However, the token remains capped below the 200-day EMA at $0.1985 and the 61.8% Fibonacci retracement at $0.2001

These levels represent immediate resistance for the current recovery attempt. Technical indicators continue to lean slightly positive. The RSI remains near 48, reflecting bearish momentum, while the MACD stays above the zero line, suggesting underlying bullish momentum has not yet faded completely.

If the bulls regain control, XLM could rally towards the $0.1985 (200-day EMA) and $0.2001 (61.8% Fibonacci retracement).

A daily candle close above these levels would allow XLM to extend its rally towards the $0.2188, $0.2376, and $0.2607 resistance zones. 

However, if the bearish trend persists, XLM could drop below $0.1922 (50-day EMA) and $0.1872 (100-day EMA) in the near term.

A decisive close below these levels would expose lower demand zones at $0.1774, $0.1735 (78.6% Fibonacci retracement), and $0.1421 (major structural support)

Holding above the 50-day EMA would help preserve XLM’s near-term recovery, while a break below $0.1872 could shift momentum back in favor of sellers.