Stellar (XLM) price shows signs of life despite bearish pattern

The Stellar (XLM) price is facing conflicting technical signals as its downtrend continues to deepen, with the coin falling 29% over the past 30 days from its highest level since 2021. The recent formation of a death cross on December 20 suggests increased bearish pressure, albeit a sharp spike. Buying activity may signal a potential trend reversal.

The DMI indicates increasing downward momentum with ADX above 25, but a sharp jump in the CMF to 0.19 indicates significant institutional accumulation. This technical divergence creates a critical phase for XLM, with immediate support at $0.31 and potential resistance at $0.40 if the bullish momentum continues.

XLM DMI is showing a strong bearish trend

The Directional Movement Index (DMI) for Stellar is showing increasing trend strength, with its Average Directional Movement Index (ADX) rising from below 20 to 26.8 in just four days.

ADX measures the strength of a trend regardless of direction: values ​​below 20 indicate a weak trend, 20-25 indicate an developing trend, and values ​​above 25 signal a strong trend. When ADX rises above 25, it means the current trend is gaining strength and is likely to continue.

XLM DMI. Source: TradingView

The current D+ at 13.2 and D- at 21.5 coupled with the rise in ADX at 26.8 paint a bearish picture for the XLM price. Since D- (negative directional indicator) is higher than D+ (positive directional indicator), this confirms the bearish nature of the trend.

A rise in ADX above 25 suggests that this downward move is intensifying and may continue, with the significant gap between D- and D+ increasing the likelihood of a sustained downward price movement.

Stellar CMF has jumped in the last 24 hours

The Chaikin Money Flow (CMF) for XLM increased dramatically, jumping from 0.03 to 0.19 in just 24 hours.

The CMF indicator combines price and volume to measure buying and selling pressure. Positive values ​​above zero indicate accumulation, while negative values ​​indicate distribution. The magnitude of the reading (closer to +1 or -1) indicates the strength of the cash flow.

XLM CMF. Source: TradingView

The jump in CMF to 0.19, the highest since November 24, signals strong buying pressure and institutional accumulation.

This significant increase from almost neutral territory (0.03) to a significantly positive value suggests a noticeable shift in sentiment: money is flowing into Stellar at an accelerated pace. When the CMF shows such a sharp positive shift, it often precedes an upward price move as it indicates strong buying conviction from larger market participants.

XLM Price Prediction: Will the Downtrend Prevail?

The XLM price recently received a significant bearish signal with the formation of a death cross on December 20 when the short-term moving average crossed below the long-term average.

This technical pattern suggests increasing selling pressure, with immediate support at $0.31 critical to price stability. If this support does not hold, the XLM price could continue to decline towards the $0.25 level, which poses significant downside risk.

XLM price analysis. Source: TradingView

However, recent Chaikin money flow data suggests the possibility of a trend reversal and upward momentum. If Stellar price is able to capitalize on this positive cash flow and establish an uptrend, it could challenge the immediate resistance at $0.40.

A break above this level could pave the way for further gains to $0.47, which represents a 34% upside potential from current levels, although this scenario would require sustained buying pressure to overcome the current bearish technical situation.

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