Stellar Faked Everyone Out at $0.15 – Now It’s Coiling for the Next Move

Stellar (XLM) is sitting at $0.1588 at the time of writing – down 1.6% on the day, practically unchanged.

But the two weeks of price action that got it here are worth paying attention to, because what happened around February 22nd was not a normal pullback.

That Drop Was a Trap?

Price had been grinding sideways in the $0.158–$0.164 range for nearly two days when suddenly it just collapsed, straight down to roughly $0.15 on the highest sell volume seen across the entire two-week window. Looked like a breakdown. Felt like one too, probably, for anyone holding.

Except it wasn’t. Price reclaimed the level within hours and never looked back, pushing all the way up to $0.168 by February 25th before cooling off. That kind of move, flush below support, fast recovery, immediate rally, has a name – liquidity sweep. The market hunted stops beneath support, collected the orders sitting there, then reversed.

According to recent analysis from crypto trader GainMuse, that’s precisely what happened. XLM flushed below channel support, quickly reclaimed it, and has since transitioned into a compression structure while stabilizing above the recent low. GainMuse describes the current setup as a descending compression channel, tightening price action beneath a falling resistance line, which historically precedes an expansion move once one side finally gives.

The Compression Is Tightening

Here’s where things get interesting. Since the February 25 high at $0.168, XLM has been making lower highs while holding above the $0.157–$0.158 area. That’s compression. The range between where sellers are capping the price and where buyers keep stepping in is shrinking. Something has to give.

GainMuse put a hard line on the downside: $0.14. A drop beneath that level invalidates the rebound thesis entirely and would likely signal the broader descending channel is still in control. That’s not where price is right now, there’s meaningful cushion, but it’s the number to watch if the compression breaks to the downside instead of up.

To the upside, breaking through the falling resistance line that has capped every rally attempt since late February would open room toward the upper boundary of the broader channel. That’s a significant distance from current price, but compression breakouts, when they’re real, tend to cover ground quickly.

What the Bigger Picture Says

Zooming out, XLM has been in a persistent downtrend since peaking near $0.184 on February 15th. Every attempted recovery has failed at a lower high. The current coil is forming at the lower end of that range, which means the bulls are being asked to prove themselves from a position of disadvantage.

It’s not a terrible spot to watch. The fake breakdown and recovery showed genuine buyer interest at these levels. Volume during the recovery phase has been steady if unspectacular.

But the compression has to break upward with conviction, not a slow grind, not a weak push, or this just becomes another lower high in a chain of them.

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