Stellar Lumens (XLM) Price to Surge Amid Stablecoin Boom

The XLM price has dropped 20% from its July high due to a recent rally pause. However, technical analysis suggests that it may surge again, as it has formed a bullish flag and a falling wedge on the daily chart. Stellar's stablecoin assets are nearing the $200 million milestone, with the total value locked in its DeFi apps reaching a record high. This growth supports its goal of disrupting the payment industry.

Stellar Lumens (XLM) has experienced a significant drop in price, declining by over 20% from its July high. The recent decline coincides with a broader market pause and a selloff in XRP, which also saw a substantial drop following an insider sale of tokens worth millions [1]. Despite the current downturn, several factors suggest that XLM may rebound in the near future.

Technical Analysis Indicates a Potential Rebound

Technical analysis of the XLM price chart reveals two notable patterns: a bullish flag and a falling wedge. These patterns suggest that the price may surge again. A bullish flag is a continuation pattern that indicates a potential reversal from a bearish trend, while a falling wedge signals a temporary price consolidation before a breakout [1]. Both patterns suggest that XLM's price may rally, potentially reaching its year-to-date high of $0.5100.

Increasing On-Chain Activity and Stablecoin Adoption

The drop in XLM's price has been accompanied by a surge in on-chain activity. According to Nansen data, Stellar's transactions jumped by 22% in the last seven days to 2.93 million, surpassing Ethereum (ETH) in terms of transactions processed [1]. The number of active addresses on the Stellar network also increased by 16% to 208,000, indicating growing user engagement. Moreover, the network's fees jumped by 99% to $73,000, highlighting the network's increasing activity and usage.

Stablecoin adoption has also been on the rise. Stellar's stablecoin supply has increased by 15% in the last 30 days to $184 million, while its transaction volume has soared by 40% to $1.8 billion [1]. The growth in stablecoin assets supports Stellar's goal of disrupting the payment industry by providing a stable unit of account for digital transactions.

Regulatory Support and Future Prospects

The recent decline in XLM's price may also be attributed to the signing of the GENIUS Act into law. The act sets up a regulatory framework for stablecoins like USDT, which could potentially benefit Stellar as it aims to become one of the top processors of USD Coin, a popular stablecoin [1].

In conclusion, while Stellar Lumens has experienced a significant drop in price, technical analysis and increasing on-chain activity suggest a potential rebound. The growth in stablecoin assets and regulatory support further bolster Stellar's prospects in the payment industry. Investors should keep an eye on the XLM price as it continues to consolidate and potentially break out of its current range.

References

[1] https://crypto.news/xlm-price-has-crashed-3-reasons-stellar-may-rebound/