Stellar has achieved a major victory from organizations — so why is XLM still declining?

Stellar (XLM) is in a downtrend with continuous selling pressure pushing the price to lower levels. The sideways market does not provide much support, as selling pressure still outweighs buying demand.

Current investor participation is quite limited, making XLM vulnerable to unfavorable fluctuations. Perhaps an external catalyst is necessary to reverse this negative trend.

Stellar Expands Application Potential

Although the market is bleak, Stellar has attracted significant attention as the most prominent token, receiving 73% positive feedback from investors. This surge comes after Societe Generale-FORGE (SG-FORGE) announced the successful launch of EUR CoinVertible—a euro-backed stablecoin compliant with MiCA regulations, deployed on the Stellar network.

SG-FORGE’s choice is strategically significant for Stellar. Issuing a tightly regulated stablecoin on this platform demonstrates confidence in Stellar’s infrastructure and legal compliance capabilities. This not only strengthens Stellar’s position in the blockchain space but also opens opportunities to attract institutional investors who may have previously overlooked XLM.

Popular Cryptocurrencies | Source: Santiment## Investor Sentiment for XLM Still Not Optimistic

While positive news from SG-FORGE created a short-term excitement wave, technical indicators paint a less optimistic picture. The Chaikin Money Flow (CMF) index is currently in negative territory, indicating outflows from XLM exceeding inflows. This erodes the upward price expectations driven by SG-FORGE’s announcement.

A negative CMF also reflects a lack of confidence among XLM investors. Instead of increasing purchases, they are withdrawing funds despite recent positive news. If the outflows do not reverse soon, the launch of EUR CoinVertible may not be enough to sustain a durable price recovery.

XLM CMF Index | Source: TradingView Market data also shows significant uncertainty among XLM traders. The long and short positions are nearly balanced, with a slight tilt toward short positions. This indicates that neither bulls nor bears have a clear advantage, and the next move for XLM will largely depend on upcoming price developments.

However, downside risk remains. If selling pressure pushes XLM below $0.145, approximately $3.18 million in long positions will be liquidated. This could trigger a forced sell-off, increasing downward pressure, further damaging investor sentiment, and driving the price lower.

XLM Liquidation Map | Source: Coinglass## XLM’s Breakout Potential Still Limited

Currently, XLM trades around $0.156, slightly above the support level of $0.155, which corresponds to the 38.2% Fibonacci retracement. A descending wedge pattern has formed over the past month. Although descending wedges often have breakout potential to the upside, current technical signals advise caution before expecting a bullish trend.

If selling pressure persists, XLM could decline to $0.147—matching the 23.6% Fibonacci level, considered a key support in a bear market. Breaking this level would lead to technical decline, paving the way for a drop to $0.136. This scenario would confirm ongoing weakness and suggest that the external stimulus from SG-FORGE has not been strong enough to change the market outlook.

XLM Price Analysis | Source: TradingView Still, there is a glimmer of hope if investor sentiment improves. The price could rebound strongly from the $0.155 level, break out of the descending wedge pattern, and surpass the resistance at $0.166, then move toward $0.175. With sustained momentum, a rally beyond this level would invalidate the bearish scenario and confirm that positive developments from organizations are beginning to reflect in XLM’s value.