One of the tokens which has made huge gains in the crypto space in the last week was Stellar, which has appreciated by more than 72%, touching an all-time high price of $0.298. It is a great
One of the tokens which has made huge gains in the crypto space in the last week was Stellar, which has appreciated by more than 72%, touching an all-time high price of $0.298. It is a great turnaround in terms of momentum for a token which spent a significant amount of time consolidating.
This appreciation is attributed to the fact that the coin has been enjoying good news in terms of institutional adoption and improving regulatory environment, together with the technical breakout that had been anticipated for a while now. The volume of trade has increased to 2.55 billion.
One of the key reasons for the recent rise in price of XLM is the news regarding the integration between the tokenization platform and the Stellar blockchain by the Depository Trust & Clearing Corporation (DTCC).
The DTCC is an integral part of traditional finance, dealing with the transfer of value in trillions of dollars through securities transactions. Thanks to this move, institutions will be able to tokenize and trade their stocks, ETFs, Treasuries, and others through the Stellar blockchain, and the target launch date has been set at 2027.
For the crypto community, the move represents yet another example of the adoption of blockchain technology by the traditional finance industry. Indeed, thanks to this decision, the chances of the Stellar network becoming one of the largest platforms for tokenized real assets, currently one of the hottest sectors within digital assets, have increased.
Read Also: XLM Up 100%, XRP Stuck: Is It Time to Dump XRP for Stellar?
The value of XLM has also received a boost due to the optimistic sentiment surrounding crypto regulation in the US market. The Clarity Act passed through the Senate Committee vote, which is another step towards regulation clarity in the space.
Networks dedicated to payments, such as Stellar, can be positively affected should the law-makers decide to move on with further legislation for regulation purposes. At the same time, institutional access to Stellar continues to improve. CME Group launched Stellar futures earlier this year, creating a regulated market for larger investors.
XLM has also been included in several pending multi-asset ETF applications that are awaiting regulatory approval. These developments don’t guarantee future demand, but they do make it easier for traditional investors and institutions to gain exposure to the asset.
Interestingly, some traders argue the charts pointed to a breakout before the DTCC announcement became the main topic of discussion. We had a look at the weekly XLM chart shared by Crypto Patel, and the setup was already improving before the latest news cycle.
Stellar spent several months developing a foundation ranging from about $0.136 to $0.190, a range that correlated with critical Fibonacci numbers and a value gap for which traders had been patiently waiting. The foundation proved to be solid; buyers came into action, and the price of Stellar soared.
Source: X/@cryptopatelThe rally pushed the token above the 0.5 Fibonacci retracement level near $0.24 and close to the next resistance area around $0.30. More importantly, it broke a long pattern of lower highs and lower lows that had controlled the market since the previous cycle.
Volume has been one of the most encouraging parts of the move. More than 2.55 billion worth of trading activity accompanied the breakout, which gives the rally more credibility than a typical low-volume spike.
After a move of this size, traders are naturally asking whether the XLM price can continue higher. The first thing to watch is support. The price range from $0.22–$0.24 has turned out to be vital since it was formerly resistance before the breakout.
Provided that buyers protect the region, the technical picture will be bullish. The first target on the upside is expected at the $0.30 level, followed by the more significant resistance area near the $0.38 level. In case momentum stays high, another target for traders could be the $0.58 region.
However, there are dangers too. Momentum oscillators have reached overbought conditions after the price surge. Specifically, the 14-period RSI moved above the 86 mark, usually signaling correction.
XLM is used to pay transaction fees on the Stellar network, facilitate cross-border transfers, and act as a bridge asset between different currencies and tokens.
What is the Clarity ActThe Clarity Act is proposed U.S. legislation intended to establish clearer rules for digital assets and define regulatory responsibilities between government agencies.
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The post Here’s Why Stellar (XLM) Price Is Pumping Hard Right Now appeared first on CaptainAltcoin.
