Stellar [XLM] Has Been in a Downtrend for Quite Some Time

This has shown a historical pattern of sharp price fluctuations following peaks in its bubble risk oscillator.

Stellar [XLM] has been displaying a general downtrend and this has shown a historical pattern of sharp price fluctuations following peaks in its bubble risk oscillator.

The Short-Term Bubble Risk chart follows price in its oscillator levels.

The oscillator, ranging from 0 to 1, repeatedly spiked above the 0.5 mark, signaling high bubble risk. Notably, these spikes in 2017, 2018, 2021, and 2025 correlated closely with substantial price drops.

Source: IntoTheBlock

In 2017, XLM peaked at $0.9 but later dropped to $0.1 by 2019, marking a 90% decline from its 2018 all-time high (ATH). A similar pattern emerged in 2021, with XLM reaching $0.7 before dropping to $0.1 by 2023.

In 2025, XLM briefly surged to $0.4 before falling back to $0.1, registering an -84.5% decline as the oscillator peaked at 0.808, indicating strong bearish momentum.

Each oscillator spike above 0.5 was followed by a substantial decline, suggesting continued volatility in the asset.

However, if the oscillator drops below 0.5 and shows stability, it could signal a reversal from the bearish trend.

If XLM manages to maintain a price above $0.4, it may break free from its pattern of steep declines, setting the stage for a potential bullish phase.

XLM: A closer look at ATH declines

The XLM Percentage Drawdown from ATH chart highlighted the coin’s price history and significant declines. After hitting a peak of $0.9 in 2018, XLM dropped over 90% to reach $0.1 by 2019.

Source: IntoTheBlock

A similar peak at $0.7 in 2021 led to an -80% drawdown by 2022. In 2025, XLM briefly touched $0.4 before falling to $0.1, registering an -84.5% decline.

The consistent pattern of -80% to -90% drawdowns highlights the asset’s volatility and bearish tendencies.

Stability in price above $0.4, combined with a drawdown of less than -50%, may indicate a bullish reversal. As XLM stabilizes and reduces volatility, it could shift away from its historical trend of steep declines.

Liquidation risks and safer entry zones

XLM’s liquidation heatmap revealed key liquidity zones and price fluctuations between $0.262026 and $0.289401. At press time, the price was at $0.263026, with significant liquidation leverage above $0.28.

Dense clusters at $0.285 and $0.289401 highlighted high liquidation risks if prices rose.

Source: Coinglass

Conversely, lower liquidity pools were present at $0.27 and $0.265, offering a relatively safer entry point. Minimal liquidation pressure was observed at $0.262026.

Investors seeking lower liquidation risk could consider entering between $0.262026 and $0.265, avoiding positions above $0.28.

A breakout beyond $0.289401 with reduced liquidation pressure could indicate a bullish trend, making entries above $0.29 more viable for momentum traders.

In conclusion, XLM’s historical trends indicate continued volatility, with sharp price corrections following oscillator peaks. However, a stabilization in drawdowns and reduced liquidation pressure could offer a path for recovery.