As an established top 30 cryptocurrency, Stellar Lumens (XLM) shares some similarities with Cardano (ADA) and TRON (TRX) in terms of price history and market dynamics. However, XLM's recent rally has outpaced both rivals.
Severe Bear Market Drawdowns
Like most cryptos, XLM hit its all-time high of $0.88 during the 2017-2018 bull frenzy before crashing over 80%. Both ADA and TRX saw comparable peak-to-trough declines of 90% or more after euphoria evaporated.
These severe bear markets reflect the high risk and volatility that applies to both major cryptocurrencies like XLM as well as smaller altcoins. Speculative manias invariably subside.
Bottoming Out Process
After capitulating in 2018, XLM stabilized in the $0.05 to $0.10 range for several years alongside ADA and TRX. This trading range reflects accumulation by long-term holders at discounted prices.
XLM held this key support zone even amid the 2022 crypto winter. This signals strong hands are unwilling to sell below $0.10, underpinning the bottoming out process.
XLM Leads Rally
Unlike ADA and TRX which rallied 10-15% off their lows, XLM has surged over 70% in the past month. This breakout reflects a rotation into high-potential altcoins as bearish pressures ease.
XLM benefits from having key utility for low-cost global payments. Its focus on developing markets differentiates it from ADA and TRX which target blockchain networks and DeFi apps. This may be driving renewed investor interest.
Bull Run Potential
With its strong technical and fundamental setup, I believe XLM has substantial room to run if crypto markets enter a bull phase. Further upside towards the $1.00 level seems likely over the coming year, representing 200%+ gains from current prices.
However, XLM will remain vulnerable to volatility and macro headwinds. Taking profits along the way and managing risk exposure is prudent. But the long-term investment case looks strong at current levels for patient investors.
Is XLM a Strong Buy in Anticipation of a Bull Run?
Given its technical breakout and fundamental strengths, Stellar Lumens (XLM) appears well-positioned to capitalize on the next crypto bull run. But prudent investors must weigh the potential upsides against the inherent risks.
The bullish thesis is quite compelling for XLM. As a top-30 crypto with strong real-world utility, XLM has all the ingredients needed for substantial gains in a bull cycle. Its discounted price and solid base built over the past year add to the appeal.
However, XLM faces stiff competition from both payment coins and broader smart contract platforms. Regulatory hurdles for cryptocurrencies also persist across key target markets. And macro conditions may delay or dilute the next bull run.
On balance, dollar cost averaging into an XLM position seems prudent rather than going "all-in" here. Its risk-reward profile warrants a place in most crypto portfolios. But prudent position sizing and risk management remain essential.
How High Can Stellar's Price Go This Cycle?
Given Stellar's strong upside momentum, investors are wondering how high XLM could potentially climb this market cycle. While impossible to predict with certainty, analyzing key price levels and historical trends sheds some light.
Realistically, XLM retesting its all-time high near $0.90 seems achievable if overall crypto market capitalization returns toward $3 trillion. This would require a roughly 3x gain from XLM's recent pricing.
However, parabolic rallies where XLM and other altcoins gain 10x or more are also possible in speculative blow-off tops. If euphoria sets in across financial markets, ratios like XLM exceeding $5.00 cannot be ruled out.
The key variable remains the magnitude of the next crypto mania. Under a moderate bull case, $2-3 may be achievable. But if irrational exuberance reaches 2017 levels again, even $5-10 cannot be ruled out for XLM and blue-chip altcoins.
Of course, those kinds of unsustainable vertical rallies also heighten risks of major crashes once the music stops. Prudent risk management and avoiding "get rich quick" delusions remain essential in crypto investing. But for patient believers, XLM offers exciting upside potential.