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Stellar price has retreated sharply in the past few months. The XLM token peaked at $0.6420 in December last year and then crashed to the current $0.3295. It has moved into a deep bear market after plunging by about 50% from its highest level in December. So, is the Stellar Lumens a good buy or sell at these levels?

The XLM price has remained under pressure in the past few months as it collapsed by almost 50% from its highest point in 2023. It has already moved below the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bears are gaining strength.

Stellar price is nearing the first support level of the Woodie pivot point. It has also formed a head and shoulders chart pattern, a popular sign of bearish reversal. Further, Stellar has dropped below the bottom of trading range of the Murrey Math Lines tool.

Therefore, the XLM price will likely continue falling as sellers target the weak, stop & reversal point at $0.2440. 

On the positive side, the coin has formed a falling wedge chart pattern, a popular bullish reversal sign in the market. However, the spread between the two falling trendlines indicates that the downtrend may continue in the coming weeks.

There are several fundamental catalysts that may push the Stellar lumens price higher in the coming weeks.

First, there are signs that the Securities and Exchange Commission (SEC) will approve a spot XRP ETF later this year. All indications are that the agency, under the incoming chair, Paul Atkins, will embrace a different approach than Gary Gensler. In this, he will approve quality funds, especially of Made in USA cryptocurrencies.

An XRP ETF approval will raise the odds that the SEC will approve a spot XLM ETF that has been filed by Canary Capital. XRP and XLM are often seen as cousins since Stellar’s founder was also part of the team that started Ripple. The two crypto projects are also in the money transfer industry.

A spot XLM ETF would popularize the network and lead to more inflows from Wall Street investors as we have seen with Bitcoin and Ethereum. 

Second, there are signs that Soroban, Stellar’s layer-1 network, is doing well as the total value locked (TVL) in the network rises. The TVL has jumped to a record high of $61 million, up from last year’s low of $7.5 million. Some of the biggest players in the DeFi industry are LumenSwap, Blend, and Aquarius Stellar. 

Stellar is also a leading player in the Real-World Asset (RWA) tokenization industry. Franklin Templeton’s FOBXX assets have reached over $372 million. 

Third, Stellar price may benefit from the upcoming Bitcoin price rebound. The weekly chart shows that the bullish flag chart pattern and a cup and handle pattern, pointing to an eventual comeback in the coming months. Altcoins like Stellar always do well when Bitcoin is in a strong uptrend.

Further, Stellar’s futures open interest has crashed in the past few weeks. It fell from last year’s high of $436 million to $134 million. Falling futures open interest is often a contrarian catalyst for a cryptocurrency. For example, the interest bottomed at $26 million ahead of the November surge. 

The post Stellar price prediction: here’s the outlook for the XLM token appeared first on Invezz

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