As the downtrend of Stellar (XLM) continues deepening, its price is facing conflicting technical signals. In the past 30 days, the token has dropped 29% from its highest level since 2021. The recent death cross formation on December 20 indicates increasing bearish pressure, but a surge in buying activity may signal a potential trend reversal.

The DMI indicates that the bearish momentum is strengthening, with the ADX above 25, but the CMF has sharply risen to 0.19, indicating significant buying by Institutions. This technical divergence has laid a crucial stage for XLM, and if the bullish momentum continues, Resistanceat $0.31, the potential resistance level is at $0.40.

XLM DMI shows a strong bearish trend.

The Directional Movement Index (DMI) of Stellar shows that the trend intensity is continually increasing, with the Average Directional Index (ADX) rising from below 20 to 26.8 in just four days.

ADX measures trend strength, regardless of direction. A reading below 20 indicates a weak trend, 20-25 indicates a trend is developing, and above 25 indicates a strong trend. When the ADX rises above 25, it suggests that the current trend is gaining momentum and may continue.

Currently, the D+ reading is 13.2, and the D- reading is 21.5. Additionally, the ADX has risen to 26.8, indicating a bearish trend for Stellar prices. The fact that D- (negative directional indicator) is higher than D+ (positive directional indicator) confirms the bearish nature of the trend.

An ADX above 25 indicates that this downward trend is strengthening and may continue, while the significant gap between D- and D+ enhances the likelihood of continuous downward price movement.

The Stellar CMF has risen in the past 24 hours.

The Chaikin Money Flow (CMF) for XLM has experienced a sharp increase, soaring from 0.03 to 0.19 in just 24 hours.

The CMF indicator combines price and volume to assess Buy and Sell pressure. Positive values above zero indicate accumulation, while negative values indicate distribution. The magnitude of the reading (close to +1 or -1) reflects the intensity of the money flow.

The CMF has soared to 0.19, the highest reading since November 24, indicating strong buying pressure and institutional accumulation.

The substantial rise from a near-neutral area (0.03) to a significantly positive value indicates a significant shift in sentiment, with funds accelerating their Inflow into Stellar. When the CMF shows such a substantial positive change, it typically predicts a price increase, as it suggests strong buying confidence among large market participants.

XLM Price Prediction: Will the Downtrend Continue?

XLM price has recently shown significant Put signals, forming a death cross on December 20, with the short-term moving average dropping below the long-term average.

This technical pattern indicates increased selling pressure, and the current Resistance at $0.31 is crucial for price stabilization. If this Resistance fails to hold, the XLM price could further decline to $0.25, indicating substantial downside risk.

However, recent Chaikin money flow data suggests that the trend may reverse and show upward momentum. If the Stellar price can capitalize on this positive money inflow and generate an upward trend, it may challenge the immediate Resistance at $0.40.

Breaking through this level could pave the way for further increases to $0.47, potentially rising 34% from current levels, but this scenario requires sustained buying pressure to overcome the current Put technical setup.

In short,

in the context of a death cross formation and a strengthening Put trend, XLM has dropped 29% from its 2021 high within 30 days.

technical indicatorsIt shows a conflict: an increase in ADX indicates a strong downward trend, while a surge in CMF suggests Institutions are buying.

If bullish momentum occurs, the price will face a critical Resistance at 0.31 USD, and may rise 34% to 0.47 USD.