Warning: XLM may plummet 40% when bearish crossover signals appear.

When the overall crypto market rose to the sky in August, XLM often went against the tide. In just the past month, the price of XLM has evaporated by 11%, and in the last 24 hours, it has continued to lose an additional 4.2%, double the overall market fall of 2%.

This continuous decline has raised questions among many traders: can XLM still recover?

On-chain data and technical signals both indicate that the downtrend still prevails, unless the bulls intervene in time. If the "bearish crossover" signal is confirmed, Stellar could even head towards a new bottom.

Warning Signal: Social Dominance Index Plummets

One of the first warnings comes from the social dominance index – a measure of the proportion of discussions about a project in the crypto space compared to the entire market. According to Santiment, this index has fallen to the sky from 1.71% on July 13 to just 0.51% currently, corresponding to a decrease of nearly 70%.

The Social Dominance index of XLM has fallen by over 70% | Source: SantimentIn the past, when social dominance dropped to such low levels, it often accompanied prolonged correction phases. For example, in March, after the index collapsed, the price of XLM slid nearly 30%, from $0.35 to $0.25. If this scenario repeats, the possibility of XLM continuing to plummet is entirely plausible.

At the same time, the 4-hour chart also shows that the orange EMA 50 ( is about to cross below the blue EMA 200 ), a technical signal often referred to as a "death cross."

The price of XLM and death cross | Source: TradingViewThe exponential moving average (EMA) tracks price trends by placing more emphasis on recent candles. On short-term charts like the 4-hour, traders often monitor whether the 50 EMA crosses below the 200 EMA.

If it happens, this will be a typical signal of fall, reflecting the short-term rise that is gradually weakening compared to the long-term trend, which could lead to sharp declines if the support levels are broken.

When the "death cross" is confirmed, it will further reinforce the warning from social dominance data, indicating that the momentum of Stellar is weakening and XLM is at risk of falling deeper.

Thin support cluster – Risk of falling to $0.24

Currently, the price of XLM is fluctuating around $0.39, slightly above the weak support level of $0.38. If it loses this level, the price could quickly fall to $0.36 and then to $0.24.

XLM Technical Analysis | Source: TradingViewThis will mark a correction level of nearly 40% from the current level. What is concerning is that the support levels below $0.39 are quite close together, which could cause selling pressure to sweep through multiple levels at once, leaving a large gap below.

To recover, the bulls need to reclaim the range of $0.43 – $0.45. Only then will Stellar have a chance to return to the recent peak around $0.52. Otherwise, the downtrend will continue to dominate, and when the "death cross" forms, it could push XLM into a deeper correction cycle.

Vincent