Stellar (XLM) begins May 2025 in a precarious position, showing weaker performance compared to Bitcoin and other cryptocurrencies in terms of price movement and trading volume. Despite tracking Bitcoin’s overall direction, Stellar has not capitalized on the same upward trends, while still being affected by market downturns.
The trading volume has significantly decreased from its peak earlier in the year, indicating a decline in market interest and liquidity. Sitting slightly above a crucial support level with a potential impending death cross, Stellar faces a crucial month that may shape its short-term trajectory.
Stellar has been trailing behind Bitcoin with less pronounced volatility in recent weeks. While Bitcoin has surged by over 14%, Stellar has only recorded a 2.8% increase, lagging behind Bitcoin and other altcoins like Hedera that have displayed stronger positive responses.
Moreover, Stellar has been exhibiting typical altcoin behavior by experiencing more significant drops compared to Bitcoin during market corrections. This lack of consistent performance suggests wavering trader confidence and could impede its attractiveness in a risk-friendly market environment.
The trading volume for Stellar has notably declined in the past month, reaching its peak at $311 million on April 23, significantly lower than previous highs observed earlier in the year. This diminishing volume signifies reduced trader interest and may hamper any substantial price movement, especially for a token that struggles to keep up during bullish phases.
Furthermore, Stellar currently struggles with lower volume levels compared to the earlier months of the year when daily trading frequently surpassed $1-2 billion. This decreased liquidity environment may restrict any strong price movements and volatility for Stellar in the near future.
Stellar is currently teetering above a critical support level at $0.26, with indicators suggesting a potential formation of a death cross where short-term exponential moving averages intersect below long-term ones. If the support at $0.26 is breached and the death cross confirms, Stellar's price might decline further towards $0.239 and potentially $0.20, indicating a more profound bearish trend.
On the other hand, a positive price momentum could be seen if Stellar breaks through the resistance at $0.297. This breakthrough could pave the way for reaching $0.349 and $0.375, with a chance to move even higher towards $0.44 and $0.495 if there is an improvement in volume and overall market sentiment.