"XLM's Liquidity Sweep Raises Red Flags for Traders"

Stellar (XLM) is currently facing potential bearish momentum, as recent technical indicators suggest a possible retest of key support levels. At the time of analysis, XLM was trading near $0.359, operating within a corrective structure following a rejection at the daily Fair Value Gap (FVG) zone. Analyst Crypto Patel highlighted this development on X, identifying a high-probability short opportunity based on the token's behavior around these price areas [1].

The bearish setup is underpinned by a sweep of buy-side liquidity (BSL), which often signals weakening upward momentum. According to Patel’s analysis, the rejection at the FVG zone suggests that upward price resistance has not yet been fully overcome, potentially leading to a continuation of the downward trend once a market structure shift (MSS) is confirmed. Key price levels identified include an entry zone at $0.3555, a stop-loss (SL) at $0.3712, and a target price of $0.3251, which marks a liquidity draw zone [1].

Patel further noted that both BSL and SSL have been swept in recent price movements, reducing the immediate liquidity available in the market. This dynamic increases the likelihood of a directional move, with the bearish scenario appearing more probable given the current market structure. A move toward the $0.325 liquidity zone aligns with prior demand levels where buyers have historically stepped in, suggesting a potential area of accumulation if the downward trend persists [1].

For short-term traders, the current price setup presents an attractive risk-reward profile. However, Patel emphasized that the bearish scenario would be invalidated should XLM break above the $0.3712 level. A breach of this threshold would indicate a potential return of buying strength and could signal a reversal of the bearish continuation pattern. This makes the $0.3712 level a critical price point to monitor for any changes in market sentiment [1].

While the technical indicators currently favor a short-term bearish outlook, the broader market environment and macroeconomic factors may influence XLM’s performance. Traders are encouraged to closely monitor price behavior around key levels and adjust positions accordingly. With the FVG zone already showing signs of rejection and liquidity targets below the current price, the market appears primed for a potential short-term bearish move, particularly if the MSS continues to develop as anticipated [1].