[updated Nov 27th] Stellar is an open source blockchain platform that connects payment systems, banks and the people. It’s designed to move money quickly, reliably and at meager fees. Launched in 2014, the usability of Stellar has seen it rise the crypto charts rapidly. This piece will examine XLM price
It’s currently the fifth largest crypto coin with a market cap of $2.6 billion.
Below we will look at reasons why XLM price could cross the $1 mark soon.
Creation of Interstellar
In another case that highlights the growing usability of the stellar network, Chain, a blockchain startup was recently acquired by Lightyear, the for-profit branch of the Stellar Development Foundation. The acquisition led to the creation of a new entity called Interstellar.
Since being founded in 2014, Chain has managed to raise over $40 million in private capital. It has also worked with companies such as Visa, Nasdaq, and Citigroup. The startup describes itself as a cryptographic ledger system that makes financial services smarter, more connected and more secure.
Interstellar will be headed by Adam Ludwin, the former RRE Ventures partner and founder of Chain. He will serve as the new project’s CEO while Jed McCaleb, Stellar and Ripple Cofounder will serve as the CTO of the project.
Commenting on the acquisition of Chain by Stellar, Ludwin said:
“All of the clients that we have now have effectively shifted from using a traditional database model to using a tokens model, issuing assets on a local environment. By partnering with Stellar, you can fire an asset to another institution.”
Now, it seems Chain’s push for enterprise blockchain adoption is the reason why Stellar saw it fit to acquire the company. In a statement McCaleb said:
“Chain’s team has led the market for enterprise adoption of blockchain technology. It’s a critical component of building a future where money and digital assets move over open protocols.”
IBM’s Launch Of A Stellar Backed Blockchain World Wire Payments System
The good news keeps coming the Stellar way, and the recent adoption of the network by IBM promises to boost the fortunes of XLM. In September, International Business Machines Corp. announced it was launching the Blockchain World Wire, a blockchain based payment system that is backed by the Stellar protocol.
The platform promises to revolutionize cross-border payments according to IBM. It will operate similarly as Ripple’s blockchain settlement systems which use XRP to transfer large amounts of money across borders with little to no fess.
When the platform starts to operate officially, it will facilitate instant clearing and settlement of all transactions through the Stellar blockchain network.
IBM describes the new product as:
“IBM Blockchain World Wire, the new financial rail that can simultaneously clear and settle cross-border payments in near real-time. Integrating with your existing payment systems, you can replace costly opacity with affordable transparency – and that can bring greater financial opportunity to all.”
In addition to the work with IBM, It is also being rumored that Fidelity may opt for the XLM blockchain in moving digital assets across its platforms. Although not confirmed, it must be said that many financial market price moves are defined by rumors.
If such a move came to pass, it would boost XLM price significantly, potentially even to the $1 level.
Addition On BitGo
At the start of October, BitGo, one of the leading crypto startups that offers custodian solutions announced that it was adding XLM and Dash on its list of cryptocurrencies. Customers can now generate wallets for both starting this month.
BitGo is one of the world’s most secure wallet providers. The new additions make it exciting for investors of both cryptocurrencies.
Mike Belshe, the CEO and founder of BitGo, said that the additions were due to their unique features that offer some advancements, especially around payments.
He adds that Stellar was a clear pick for the Startup as it narrowly focuses on providing global payments for more consumers. It’s something that differentiates it from Bitcoin. Unlike BTC which acts as a store of value, XLM focuses on transactions.
In addition to BitGO, positive exchange-based news came in the listing of the XLM token on the Hong-Kong based Coinsuper exchange.
XLM is paired with Bitcoin on major exchanges such as Binance and Bitfinex, where the XLM/BTC is actively traded. Today’s analysis shows that Stellar Lumens is being dragged down by the generalized bearish sentiment in the global cryptocurrency market, and is presently down by almost 23%. Is this trend going to continue? To get answers, we turn to the charts for today’s technical analysis.
There is presently no news in the market that is specific for Stellar Lumens that has led to the price declines seen in the last two days. Therefore, the price drop is more of a consequence of the bearish sentiment that presently pervades the cryptocurrency market.
Today’s technical outlook starts from the weekly chart, which represents the long-term market sentiment for Stellar Lumens. The price action for the year had as at last week, painted a picture of the inverse head and shoulders pattern, with a bullish breakout of the neckline. So to all intents and purposes, Stellar Lumens was expected to pick up steam and roll on higher. However, events in the cryptocurrency market appear to have caused some sort of setback, as the candle for the week is seen heading down below the neckline.
XLM/BTC Weekly Chart: November 20, 2018
A look at the daily chart, which is a measure of the medium-term price outlook, shows that the daily candle has pushed below the upward channel that had formed over the last two weeks.
XLM/BTC Daily Chart: November 20, 2018
So what should we make of the situations seen on the two charts?
The fact that the weekly candle is still active is an important consideration on the outlook for XLM/BTC. The weekly candle must first close before a determination can be made about whether or not the neckline upside break that occurred last week has failed. Until this happens, it is still too early to indicate whether prices will resume the upward move or fall back below the neckline. Similarly, the daily candle needs to close below the channel for a determination of a downside channel break to be made.
Trade Scenario 1
The price of XLM/BTC needs to recover above the 0.00042 BTC mark for the upside break of the neckline to continue to remain intact. This move must achieve at least 3% upside penetration (i.e. must breach the 0.000045 BTC mark to the upside), and must also be accompanied by a massive increase in buying volume to indicate that bulls have shaken off the bearish market sentiment. This has to happen in the next four days. The current market situation does not give much optimism for this, but you cannot rule anything out.
Trade Scenario 2
If the current bearish sentiment remains and sellers continue to dominate the market, then it will be very unlikely that the weekly candle will recover above the neckline. In this situation, the neckline will become the new resistance as the inverse head and shoulders pattern becomes invalid. Price action may now find itself trading in a range that has the 0.000038 BTC area as the floor (next support on daily chart), and the neckline as the ceiling. We may even see prices dipping a lot further.
Those who want to focus on trading the daily chart must first allow the current daily candles to close below the lower border of the upward channel. Then they can follow the price action as it makes a dash for the 0.00004 and 0.000038 BTC price areas in a sequential fashion. The 0.000038 price level may end up being the key support level for any downside price action in the medium-term.
The long term, mid-term and short term outlook of the XLM/USD pair is:
- Long Term – neutral to bearish
- Mid-term – neutral to bearish
Price developments in XLM/BTC will be dependent on market sentiment seen across the cryptocurrency market. Therefore, traders have to watch the news to get some direction on what price action will be.
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