Stellar's 0.41% Price Surge to $0.1195: Key Takeaways for September 15, 2023
Stellar's XLM token saw a slight 0.41% price increase over the past 24 hours, with its value rising from $0.1190 to $0.1195. This comes after a period of decline for XLM, with the token losing 3.55% over the past week. However, zooming out shows XLM is still up significantly - 42.18% over the past 6 months.
Let's take a closer look at the key metrics for XLM and what they might indicate for the token's future price action.
Current Price Levels Holding Steady
Despite the minor uptick over the past day, XLM remains locked in a trading range between $0.11 and $0.12. This range has held for over a month now, with XLM failing to break out in either direction.
The current price of $0.1195 puts XLM right in the middle of this established range. From a technical perspective, this indicates equilibrium between buyers and sellers at the moment.
For a significant price movement to occur, there will need to be a catalyst to tip the scales in favor of either bulls or bears. Absent that, the rangebound action may continue in the short-term.
Trading Volume Still Lackluster
Daily trading volume for XLM stands at $60.01 million. While not insignificant, this remains below the peak volumes XLM saw earlier in the summer.
Back in July, XLM trading volumes frequently exceeded $100 million per day as the crypto market rallied. However, as volatility has cooled in recent months, so too has XLM transaction activity.
Low trading volumes signal a lack of conviction in the market right now. With volume muted, it makes it less likely for XLM to stage a breakout or breakdown from its current range. Monitoring volume levels will be important for gauging when traders and investors may return to XLM.
Technicals Paint Mixed Picture for XLM
Analyzing the key simple and exponential moving averages shows there is conflict right now between bullish and bearish technical factors on XLM.
On the bullish side, the 50-day simple moving average is trending above the 200-day SMA. This is known as a “golden cross” and often signals a bull market is underway.
However, the 100-day SMA is below the 200-day, known as a “death cross”. This can be taken as a bearish indicator, signaling that longer term momentum remains negative.
These mixed signals indicate the tug-of-war between buyers and sellers is also playing out in the technical picture. A break above or below these trendlines could set the stage for XLM's next major move.
Final Thoughts and Prediction
In summary, XLM appears to be biding its time right now as it trades within the $0.11 to $0.12 range. Volume has dried up in recent weeks and technical factors point in opposite directions.
Looking ahead, I expect this rangebound action to continue in the near-term absent a significant catalyst. However, by Q1 2024, I believe XLM will stage a breakout as the crypto market enters its next bull phase.
My year-ahead prediction is for XLM to reach $0.30 by March 2024. This would require a break above formidable resistance around $0.20 first. If Bitcoin leads the market higher, increased institutional adoption of Stellar's network should allow XLM to outperform.
How Does Stellar's Inflation Rate Impact XLM Price?
Stellar has a built-in inflation rate of 1% per year, which gradually increases the XLM circulating supply. Some argue this consistent sell pressure helps keep XLM's price depressed. However, Stellar's inflation system has benefits that likely offset any negative price impact.
The newly minted XLM from inflation is distributed to holders who are active on the network. This provides an incentive to use and transact on the Stellar network, boosting ecosystem adoption.
Additionally, the predictable minting allows supply to steadily grow without diluting holdings too quickly. With only 1% annual inflation, any downward price impact should be minimal.
Overall, while inflation likely prevents parabolic price surges, the network effects it fuels ultimately support higher sustainable valuations for XLM. The design promotes utility and stability over speculation.
What Role Does Stellar's Partnerships Play in XLM's Future?
Stellar's high profile partnerships with payment providers, banks, and tech companies have been a key driver of XLM adoption and real-world use. These partnerships lend legitimacy and widen the on-ramps to transacting value on Stellar's network.
Notable partnerships include:
- MoneyGram - facilitates USD transfers and foreign exchange
- BitPesa - fiat currency transactions in Africa & Europe
- Keybase - encrypted messaging and dropbox alternative
By integrating with existing payments infrastructure, Stellar gives XLM the utility needed to become a transactional currency, not just a speculative asset.
These partnerships also market XLM to the partners' existing user bases. With each integration, millions of new users gain access to fast, inexpensive XLM payments and transfers.
As these partnerships continue to grow, they will play an integral role in boosting long-term XLM adoption and price appreciation. Real-world use cases are key for meaningful value creation.
