The cryptocurrency market has recently faced intense selling pressure, leading to nearly $495 million in liquidations. Stellar (XLM) dropped 8% in the past 24 hours, currently trading at $0.276. With a critical resistance level at $0.55, XLM's near-term trajectory remains uncertain.
Key Resistance at $0.55
Since 2018, the $0.55 price point has been a major resistance level for Stellar. Despite multiple attempts, XLM has failed to sustain a breakout, creating a psychological and technical barrier for traders. Crypto analyst Ali notes this resistance continues to suppress upward momentum, historically stalling price rallies.
Sell Walls and Market Dynamics
Resistance levels like $0.55 often trigger sell walls—large sell orders that halt upward movement. Overcoming these requires strong catalysts or accumulation by major holders. Without such drivers, prices typically consolidate or reverse.
Recent Price Action
- December 2024: XLM briefly surged but faced rejection at $0.55.
- January 2025: Dropped below the 50-day SMA ($0.351), signaling bearish momentum.
- Current Range: Trading between $0.355 (50-day SMA) and $0.26 (200-day SMA), indicating indecision among investors.
Broader Market Impact
Bitcoin fell below $86,000, while Ethereum dropped 2.95% to $2,128. Altcoins like XRP, SOL, and DOGE lost 4–10%, amplifying the sell-off.
👉 Why is Stellar struggling to break resistance?
Liquidations and Leverage
CoinGlass reports $493 million in liquidations:
- $317M in long positions.
- $154M in short positions.
This highlights market volatility and leveraged trading risks during downturns.
Outlook for XLM
While the $0.55 resistance and bearish market trends pose challenges, increased buying pressure could spark a breakout. Historically, sharp sell-offs precede reversals, making current levels a potential entry point for buyers.
FAQs
Q: What’s the key resistance level for Stellar?
A: $0.55, a persistent barrier since 2018.
Q: How did recent liquidations affect XLM?
A: Market-wide liquidations exacerbated selling pressure, contributing to XLM’s 8% drop.
Q: What could drive XLM past $0.55?
A: Strong buying volume or positive market sentiment shifts.
👉 Explore Stellar’s trading strategies
Final Thoughts
Stellar’s mixed outlook hinges on overcoming $0.55 and broader market recovery. Traders should monitor XLM’s price action and macroeconomic cues for directional clues.