Coin cryptocurrency Stellar on night city background and chart.
Stellar (XLM) has recently faced significant market turbulence, with its price plummeting as bearish sentiment dominates the cryptocurrency landscape. For investors and crypto enthusiasts, understanding this trend is vital as the coin’s trajectory could significantly impact potential gains or losses in the coming weeks.
The Current Market Scenario
XLM’s value witnessed a sharp drop below the critical $0.22 support level on January 19, 2026, mirroring Bitcoin’s broader market dip. Selling pressure continues to mount, and bearish bets are emboldened, placing the coin at risk of falling below the critical $0.20 demand zone. Historically, this level has served as a multi-month support, but repeated rejections now suggest further correction could be imminent.
The downward trend aligns with weakening technical indicators. XLM trades below its 50-day ($0.227) and 200-day ($0.324) moving averages, with the RSI dropping under 50—an indication of fading bullish momentum. If XLM closes below $0.20, downside targets could extend to $0.18 and even $0.14, a multi-year low.
What’s Fueling the Drop?
Several factors are driving this bearish setup:
- Market-wide Trends: XLM’s current movements correlate with Bitcoin (BTC), which has faced significant selling pressure. A weaker BTC means ripple effects (no pun intended) across altcoins like Stellar.
- Derivatives Data: Open interest for XLM fell to $131 million, with long-to-short ratios favoring short positions. This indicates growing bearish sentiment among traders.
- Technical Rejections: Stellar faced multiple rejections trying to reclaim resistance zones of $0.22 and $0.23, further confirming seller dominance.
Unless broader market conditions stabilize or on-chain metrics improve, bulls may struggle to regain ground above $0.22 in the short term.
Can XLM Recover?
While the current sentiment is bleak, XLM has a history of staging impressive comebacks. For instance, it soared from $0.10 to above $0.63 in 2024 and from $0.24 to $0.52 in July 2025. Bulls could revisit these levels under favorable market conditions.
A daily close above $0.23 will be the first signal of strength, targeting resistance zones of $0.25 and $0.32. Additionally, Stellar’s relationship with Ripple and their shared mission for cross-border payments could serve as a bullish catalyst should fundamental developments arise.
Take Control of Your Crypto Portfolio
If you’re considering investing in XLM and other cryptocurrencies, having a secure wallet is essential. The Ledger Nano X is a top-rated hardware wallet that protects your digital assets with state-of-the-art security features. With the Ledger Nano X, you can safely store Stellar and over 5,500 other digital assets—an essential tool for serious investors.
Additionally, platforms like eToro provide a user-friendly interface for trading popular cryptocurrencies like XLM, XRP, and more, giving you access to market insights and tools to strategize effectively.
Conclusion
Stellar’s price movement in the short term could determine if it becomes a stronger player in the crypto ecosystem or continues to face steep corrections. For now, keeping an eye on the $0.20 support zone and Bitcoin’s overall performance are crucial steps for traders and investors. As always, ensure you use secure wallets and trusted exchanges to safeguard your assets as the market evolves.
