Stellar price could rise as transactions, stablecoin market cap jumps
Stellar Lumens price has dropped in the past few months, mirroring the performance of most altcoins like Cardano and Avalanche.
Stellar (XLM) was trading at the crucial support at $0.25 on Sunday, much lower than last year’s high of $0.6380.
On-chain data shows that the Stellar ecosystem is doing relatively well. Nansen data shows that transactions have risen by 24% in the last seven days to 21.5 million. They have risen by almost 30% in the last 30 days to 70.5 million, making Stellar one of the most active chains in crypto.
The number of active addresses in the Stellar ecosystem has also jumped in the past few days. They rose by 15% in the last seven days to 162,947. These numbers have also translated to a 105% increase in weekly transaction fees.
Further data by DeFi Llama shows that the amount of stablecoins in the Stellar ecosystem has soared to a record high. These stablecoins, which are mostly USD Coin, have soared to nearly $300 million. This is significant since Stellar had stablecoins worth $104 million in November last year.
Stellar price analysis
The daily chart shows that the XLM price has dropped sharply from its highest point in November last year. It has moved below the 61.8% Fibonacci Retracement level.
Worse, the token will form a death cross pattern as the 50-day and 200-day moving averages approach their confluence. Such a crossover would potentially lead to a further downside.
On the positive side, there are signs that the token is slowly forming a falling wedge pattern. This pattern consists of two descending and converging trend lines, and in most cases, it leads to a bullish breakout. A good example of this pattern in action happened with the Pi Network price, which rebounded on Saturday.Â
There are signs that the XLM price is slowly forming a double-bottom pattern at $0.2282, whose neckline is at $0.30. A double bottom is another highly bullish chart pattern.
Therefore, the Stellar price will likely bounce back if it remains above the double-bottom point at $0.2282 and avoids a death cross. More gains will be confirmed if it rises above the upper side of the wedge pattern.
