ETF Hopes Hang on XLM's $0.33 Survival in High-Stakes Chart Play

XLM, the native token of the Stellar network, is currently testing a key resistance level near $0.40 amid heightened volatility driven by institutional flows. Despite a wave of selling pressure overnight, the token has found strong support near $0.38, with trading volumes surging by 115% in recent sessions. This surge in volume indicates ongoing interest from institutional investors, who continue to monitor the asset despite the prevailing regulatory uncertainty in the cryptocurrency sector.

The price of XLM has experienced a significant 296% rally year-to-date, pushing its total market capitalization beyond $12 billion and propelling it to the 18th position in the global cryptocurrency rankings [1]. Analysts have noted a potential inverse Head ‘n’ Shoulders chart pattern forming, which, if confirmed, could lead to another price correction before a breakout above $1. Currently, the price is positioned in the right shoulder of this pattern, and maintaining a level above $0.33 is critical to the formation holding [1]. The neckline of this pattern is set at $0.50, but indicators such as the Chaikin Money Flow (CMF) index and the Bull Bear Power (BBP) index suggest that bearish sentiment remains strong, with the CMF index registering at -0.10 [1].

The possibility of an XLM inclusion in a mixed-asset crypto ETF is also gaining traction, particularly with the recent filing of the Canary Capital American-Made Crypto ETF. This ETF is designed to include only cryptocurrencies created in the U.S., mined in the U.S., or operating primarily within the U.S. XLM has secured a spot as the fifth-largest cryptocurrency in the proposed fund, alongside names like Ripple (XRP), Solana (SOL), Cardano (ADA), and Chainlink (LINK). According to Bloomberg ETF analyst Eric Balchunas, the success of Bitcoin and Ethereum ETFs is encouraging a wave of new combinations in the ETF space, suggesting that XLM has a real opportunity to be included in an ETF product in the near future [1].

However, XLM faces stiff competition in the altcoin ETF space, particularly from Ethereum, which already has a well-established ETF market. On Tuesday, the XLM blockchain reported $320 million in trading volume, a figure that lags behind lower-ranked competitors like Hedera Hashgraph (HBAR) and Polkadot (DOT), which saw higher trading volumes on spot markets. Additionally, Bloomberg analysts have noted that the composition of the mixed-asset crypto ETF may change, which could result in XLM being excluded from the final lineup [1].

Despite these challenges, XLM remains a key player in the cross-border payments sector, an area that is increasingly attracting interest from both traditional and digital financial institutions. The token's potential to be included in an ETF is expected to drive demand further, particularly if regulatory approvals align with market expectations. Analysts remain cautious, however, noting that risks such as token unlocks or regulatory rejections could push the price below $0.30 support, potentially triggering further selling pressure. A successful breakout and ETF inclusion could see the price of XLM rise to $1.50 to $2 by year-end, with long-term targets as high as $5 remaining in play [1].

Source: [1] Stellar's $1 Breakout Looms: Can ETF Blast XLM To The ... (https://dailycoin.com/stellars-1-breakout-looms-can-etf-blast-xlm-to-the-moon/)