Stellar (XLM) remained under sustained selling pressure on Tuesday following modest declines in the previous session. The token has slipped below a key support zone, while the broader market context shows XRP drifting toward the psychologically significant $1.00 level. XLM and XRP share overlapping narratives as blockchain networks built for cross-border payments, and the two assets have historically exhibited notable price correlation, meaning weakness in one often coincides with pressure on the other.

Weakening derivatives-market indicators are constraining the prospects of an immediate recovery for XLM. Declining long-to-short ratios, negative funding rates, and rising open interest collectively suggest that traders are increasingly positioning for further price declines. Rising open interest combined with falling prices typically indicates that new short positions are being opened rather than existing longs simply liquidating, a dynamic that can amplify downward momentum if those positions remain unresolved.

Derivatives Metrics Signal Growing Bearish Positioning

XLM's long-to-short ratio has dropped to 0.90 on Tuesday, approaching its lowest reading in over a month. A ratio below one indicates that short positions outnumber long positions, meaning a larger share of traders are betting on further declines. The current readings point to particularly strong bearish sentiment among XLM traders.

The funding rate for XLM has also turned negative, reflecting stronger demand for short positions. These falling ratios indicate that confidence in a near-term rebound is weakening as the asset struggles to recover from its recent losses.

Technical Outlook: Key Levels to Watch

Stellar (XLM) traded near $0.161 on Tuesday, extending its decline below both short- and medium-term Exponential Moving Averages (EMAs). The prevailing structure maintains a bearish near-term outlook as buyers struggle to regain control.

The token remains below the descending trendline breakout level at $0.166, which now functions as immediate resistance. Its Relative Strength Index (RSI) stands near 35, signaling weak buying momentum without yet placing XLM in technically oversold territory. The Moving Average Convergence Divergence (MACD) indicator also remains below its zero line, reinforcing the downside bias as XLM consolidates beneath its key moving averages.

For any recovery to materialize, XLM must first reclaim the descending trendline near $0.166. A sustained move above that level could enable buyers to challenge horizontal resistance at $0.177. However, the 50-day EMA at $0.178 and the 100-day EMA at $0.181 form a concentrated resistance zone that could cap further gains. Above these levels, the 200-day EMA at $0.193 represents a broader bearish pivot; reclaiming this moving average would be necessary to signal a more meaningful trend change.

On the downside, XLM's next major support sits at $0.142. A decisive break below this level could accelerate the current decline and expose the token to additional losses before buyers attempt to establish a new price floor.