Stellar (XLM), which surged over 100% in the past week, has now witnessed a sharp decline in Open Interest. This drop in XLM Open Interest indicates waning enthusiasm among derivatives traders, potentially indicating a weakening in the recent rally’s momentum.

Although holders may remain optimistic, on-chain analysis suggests that XLM’s price could face a significant correction if the current market condition does not change. 

Stellar Market Dominance Fizzles

On November 24, XLM Open Interest climbed above $339 million, which was an all-time high. As reported earlier, this massive interest in the altcoin is linked to the surge in Ripple (XRP) price. 

However, as of this writing, the OI, as it is commonly abbreviated, has fallen to $209 million. This drop indicates that traders have closed previously open contracts worth $130 million. Unsurprisingly, this decline coincided with XLM’s price decrease, which caused it to lose 10% of its value in the last 24 hours.

From a price perspective, the drop in OI means buying pressure in the derivatives market has decreased. Hence, if the OI value continues to decline, then XLM’s price is likely to fall below $0.45.

Another bearish signal for Stellar is its declining social dominance. This metric evaluates the proportion of discussions about a cryptocurrency compared to the top 100 assets. When social dominance rises, it typically indicates heightened market interest and demand. Conversely, a decline suggests diminishing attention and potentially lower demand. 

A few days ago, XLM’s social dominance was at 3.13%. However, it has dropped significantly to 1.73%, implying that market participants are shifting their focus to other assets. If this trend persists, it could lead to further price drops for XLM.

XLM Price Prediction: Push Back to $0.28 Likely

If the declining OI and social dominance continue, XLM may struggle to sustain its recent gains. On the daily chart, the Money Flow Index (MFI) reading has dropped. The MFI measures buying and selling pressure and tells if an asset is overbought or oversold.

When the reading is above 80.00, it is overbought. But when it is below 20.00, it is oversold. As seen below, the MFI hit the overbought zone earlier before it retraced. Considering the current condition, XLM’s price could decline to $0.28.

However, a break below the $0.22 support level could push the price down to $0.17. On the flip side, if buying pressure increases in the derivatives and spot market, this might not happen. Instead, XLM could rally to $0.64.

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Ethereum price remained supported above the $3,220 zone. ETH is consolidating and might aim for a move above the $3,400 resistance.

• Ethereum started a fresh increase from the $3,250 support zone.
• The price is trading above $3,350 and the 100-hourly Simple Moving Average.
• There was a break above a connecting bearish trend line with resistance at $3,320 on the hourly chart of ETH/USD (data feed via Kraken).
• The pair could gain bullish momentum if it clears the $3,400 resistance zone.

Ethereum Price Remains Stable and Eyes More Upsides

Ethereum price remained supported above $3,200 and started a fresh increase while Bitcoin corrected gains. ETH is stable above $3,250 and is currently rising.

There was a move above the $3,300 and $3,350 resistance levels. The price surpassed the 23.6% Fib retracement level of the downward move from the $3,545 swing high to the $3,254 low. There was also a break above a connecting bearish trend line with resistance at $3,320 on the hourly chart of ETH/USD.

Ethereum price is now trading above $3,350 and the 100-hourly Simple Moving Average. On the upside, the price seems to be facing hurdles near the $3,400 level. It is close to the 50% Fib retracement level of the downward move from the $3,545 swing high to the $3,254 low.

The first major resistance is near the $3,450 level. The main resistance is now forming near $3,500. A clear move above the $3,500 resistance might send the price toward the $3,550 resistance. An upside break above the $3,550 resistance might call for more gains in the coming sessions. In the stated case, Ether could rise toward the $3,680 resistance zone or even $3,750.

Downsides Limited In ETH?

If Ethereum fails to clear the $3,400 resistance, it could start another decline. Initial support on the downside is near the $3,300 level. The first major support sits near the $3,250 zone.

A clear move below the $3,250 support might push the price toward $3,150. Any more losses might send the price toward the $3,050 support level in the near term. The next key support sits at $3,000.

Technical Indicators

Hourly MACD – The MACD for ETH/USD is gaining momentum in the bullish zone.

Hourly RSI – The RSI for ETH/USD is now above the 50 zone.

Major Support Level – $3,250

Major Resistance Level – $3,400