Stellar (XLM) Bullish Breakout Falters - Brace for Deeper Correction as Social Momentum Wanes
Stellar's much-anticipated breakout hits a wall as bearish pressure mounts
The Technical Breakdown
XLM's failure to sustain bullish momentum signals deeper trouble ahead. The cryptocurrency couldn't maintain its upward trajectory despite favorable market conditions elsewhere. Trading volumes dried up while resistance levels held firm—classic signs of weakening investor confidence.
Social Sentiment Collapse
Community engagement metrics tell the real story. Social mentions plummeted 47% week-over-week, with positive sentiment scoring at multi-month lows. When the crypto crowd stops talking, the price usually follows—downward.
Market Realities
This isn't just another dip—it's a fundamental shift in XLM's market positioning. The token now faces stronger headwinds than most altcoins in its class. Even the usual 'buy the rumor, sell the news' crowd seems to have taken an extended vacation.
Looking Ahead
Technical indicators point toward further downside unless XLM can reclaim key support levels quickly. The pattern suggests we're witnessing more than temporary weakness—this could be the start of a significant trend reversal. Because nothing says 'solid investment' like a cryptocurrency that moves opposite to its own breakout signals.
Social Buzz Fades as Buyer Control Weakens
Over the past three months, Stellar’s social dominance, which measures how often XLM is mentioned in crypto discussions, has fallen steeply from its July peak. On July 13, it reached 1.72%, but by October 7, it had dropped to just 0.16%, the second-lowest level in three months despite the ETF buzz.
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While social dominance has since bounced to 0.36%, that’s still far below its previous highs, and the slope continues to form lower highs, showing that Stellar remains out of focus among traders.
The muted chatter aligns closely with Wyckoff volume analysis trends, which track buyer and seller control shifts.
The brief rise in social activity from 0.16% to 0.36% coincided with the reappearance of blue “buyer control” bars, which show short bursts of renewed buying. But those bars have already started thinning again.
If they flip back to yellow or red (seller control), as in mid-August and late September, XLM could face another drop similar to the 12% to 20% corrections that followed those periods.
This combined decline in social traction and buying pressure suggests the market’s interest in Stellar remains soft, even during minor rebounds.
Failed Stellar Price Pattern and Hidden Divergence Point to Continuation
On the technical side, the Stellar (XLM) price has invalidated its bullish flag formation, breaking below the support trendline instead of confirming an uptrend with a breakout. This failure signals buyers couldn’t maintain control long enough to push higher.
In addition, the daily RSI has formed a hidden bearish divergence — a pattern in which the price makes lower highs but the RSI makes higher highs, usually confirming that the existing downtrend remains intact.
That downtrend, not explicitly mentioned on price screeners, began in mid-July, when XLM fell from $0.52 to $0.34, a drop of roughly 35%, and it hasn’t been convincingly broken since.
If Stellar falls below $0.37, the next key support lies at $0.34, which aligns with the late September low. A clean drop under that could extend the decline further. However, reclaiming $0.39 and then $0.41 WOULD invalidate this bearish thesis, showing renewed buyer strength.
