Stellar Lumens (XLM) firmly entered a growth phase in early July 2025, sparking a wave of optimism among traders and investors. However, in recent days, the situation has changed dramatically. The price of the token has started to fall, reducing interest from speculators. In this context, many questions have arisen: is the rally over? Or is it just a short-term correction that opens up new entry opportunities?
Reasons for the Current Drop
The entire cryptocurrency market is currently in a state of uncertainty. Bitcoin shows weak volatility, with no clear trend, while Ethereum is down more than 7 per cent from its recent highs. This situation of the major cryptocurrencies does not contribute to increasing confidence in altcoins. Under these conditions, XLM has come under pressure: selling is taking place and technical indicators point to a weakening of the short-term bullish momentum.
In addition, the decrease in the capitalisation of the altcoin segment (TOTAL3), against the backdrop of the general stagnation of the crypto market, is a further negative signal. Investors have become more cautious, especially after tens of billions of dollars have exited the market in recent weeks.
Technical Analysis of XLM
From a technical point of view, the descent of Stellar does not yet appear catastrophic. The price has moved away from local highs, but remains above key support levels formed back in June. Trading volumes have decreased, which could indicate a temporary pause rather than a complete abandonment of the asset by market participants. However, a further decline could trigger a new wave of selling, especially if the price breaks through the support zones.
If XLM manages to stay above the $0.11 - $0.115 zone, this could be interpreted as a sign of potential reversal. Otherwise, we could see a deeper correction towards $0.10 and beyond.
Fundamental Factors
At the same time as technical fluctuations, it is useful to consider fundamentals. The Stellar Development Foundation continues to develop the project infrastructure, signs new agreements and blockchain is actively used in cross-border payments. However, at the moment, the market is not rewarding this news: the main focus remains on price movements and short-term speculative gains.
However, the sustainable development of the ecosystem could play a key role in the long term. Should positive news about new partnerships or the introduction of new technologies arrive in the coming weeks, this could rekindle investor interest.
Conclusions
The decline of XLM after impressive growth is not a surprise, but a typical scenario in the crypto market. Stellar is currently in a phase of testing its strength. The market is trying to understand whether the current correction will become the starting point for a new rally or the beginning of a downtrend.
Investors should closely monitor key technical levels, the dynamics of altcoins in general and signals from Bitcoin and Ethereum. These are the factors that will determine the near future of XLM. It is important to remember: a sudden collapse does not necessarily mean a collapse, just as rapid growth does not guarantee its continuation. Rational calculation and analysis are the basis for sound decisions in the digital asset market.
