Following renewed tensions in the Middle East, risk assets as a whole came under pressure, with Stellar's token XLM continuing its downward trend on Tuesday. Market funds shifted towards safe-haven assets, putting pressure on altcoins, and XLM also fell back to near its key support level.
Higher oil prices suppress risk appetite
The report states that the latest US military operations in the Middle East have escalated tensions between the US and Iran. Iran has also reported attacks in its southern region, while the Islamic Revolutionary Guard Corps stated that two supertankers were stopped in the Strait of Hormuz and warned that regional military operations could affect the reopening of this crucial shipping lane.
As geopolitical risks escalated, WTI crude oil prices broke through $80 per barrel, leading to increased risk aversion in global markets. For the crypto market, this typically means funds are more inclined to reduce exposure to high-volatility assets, with altcoins often experiencing more significant selling pressure.
Derivatives positions continued to decline
CoinGlass data shows that XLM open interest has fallen to approximately $182.21 million, continuing the downward trend after reaching its June high. A price drop coupled with decreasing open interest typically indicates that some traders are closing out their positions rather than adding to them.
Funding rates have also turned negative, currently at approximately -0.0021%. This reflects an increase in demand for short positions in the perpetual contract market, indicating a cautious short-term sentiment.
- Open interest: approximately US$182.21 million
- Funding fee rate: approximately -0.0021%
- Current price range: approximately $0.179
0.177 becomes a key short-term level.
From a price perspective, XLM is currently trading below major moving averages, indicating continued weak short-term momentum. The article mentions that the 50-day, 100-day, and 200-day EMAs are located at $0.186, $0.190, and $0.196 respectively, forming continuous resistance levels above.
The first key support level is around $0.177, followed by a support zone around $0.173. If selling pressure continues to increase, prices may test lower levels further. If buying interest picks up, the market first needs to rise back above $0.186 to alleviate the current weakness.
