XLM remains below $0.22 as latent momentum remains
Key receivers
XLM is down less than 1% and is trading below $0.22.
If the bearish trend continues, the coin could retest the $0.20 support level.
The crypto market is enjoying Christmas as Bitcoin and other major cryptocurrencies are in the green. Bitcoin is trading above $87k after dipping below $86k a few hours ago.
However, some major altcoins, including Stellar's XLM, are still in the red despite the current market conditions. After failing to close above its key resistance earlier this week, XLM is trading below $0.22 at press time.
Bearish momentum will continue to strengthen as open interest (OI) and short bets continue to rise. If the bullish momentum continues, XLM may face further selling pressure in the near term.
XLM derivatives data suggest a bearish sentiment
The main driving force behind XLM's bearish performance is derivatives and on-chain data. According to CoinGlassXLM futures open interest (OI) increased to $112 million over the past 24 hours, compared to $30 million the previous day.
However, the rising OI was not reflected in the coin's performance as it continued to trade below major support levels.
Additionally, Conglas's long-to-short ratio for XLM reads 0.91, the highest level in one month. This indicates that despite the rising OIA, bearish sentiment in the market remains, with traders betting on the price of XLM.
XLM may drop below $0.20.
The 4-hour chart of XLM/USD is weak and volatile as the coin has underperformed in recent days. At press time, XLM is trading at $0.21 and may record further losses in the near future.
If the market trend continues, XLM could retest the December 18 low of $0.20. A close below this psychological level could lower the $0.16 low set on October 10.
The RSI on the 4-hour chart reads 43 below the neutral 50 level, indicating bearish momentum. The Moving Average Convergence Divergence (MACD) lines are also converging, indicating indecision among traders.
Conversely, if XLM recovers, it may rally towards the key resistance level at $0.22 in the next few hours.
