The native cryptocurrency of the Stellar network XLM is quickly recovering from its downtrend.
Although the asset has been in the red for weeks, its recent bullish signs have given hope to investors looking to buy XLM.
This article provides an analysis of Stellar’s projected growth and future prospects.
The XLM token of the Stellar Blockchain
Stellar is an open source blockchain platform focused on facilitating cross-border payments.
The network was launched in 2014 by Jed McCaleb, a co-founder of Ripple.
Stellar aims to help financial companies connect through blockchain technology, although their original goal was to promote financial inclusion by reaching the bankless world.
XLM powers the Stellar blockchain network and serves as a bridge that makes cross-border asset trading affordable.
The XLM tokens are not mined like cryptocurrencies like Bitcoin.
When the Stellar network was launched, 100 billion XLM coins were minted.
However, half of the tokens were destroyed in 2019, which led to the now around 50 billion XLM. The circulating supply is approximately 23.4 billion tokens.
The Stellar Network uses the Stellar Consensus Protocol (SCP). This SCP works according to four characteristics: freedom of participation, in which nobody has all or the majority of the decision-making powers, low latency, freedom of trust and security.
The Stellar blockchain is decentralized and not controlled by third parties, although it is managed by the Stellar Development Foundation (SDF).
Stellar was called a Ripple fork because it was originally based on the Ripple Labs protocol. While Stellar and Ripple have a lot in common, McCaleb says the SDF’s goals are different from Ripple’s.
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XLM price: bearish to bullish?
While the XLM price has been falling for weeks, things seem to be turning for the altcoin. But is that enough encouragement for investors looking to buy XLM?
XLM started the year trading just $ 0.127. By the end of January, XLM had risen to $ 0.302. In February the asset was trading at $ 0.527. After a series of lows, XLM continued to climb to $ 0.636 on April 14th. However, on April 23, the token plummeted to $ 0.450.
XLM began rallying again in May when it hit its all-time high of $ 0.73, but that changed when the crypto market collapsed. By the end of May, XLM had fallen to $ 0.39.
The price of the token held and fell further to $ 0.249 on June 26th. The current surge in value of the XLM asset is one of the first states of recovery after a series of downturns.
At press time, XLM is trading at $ 0.253, according to CoinMarketCap, up 14.66% over the past 24 hours. The coin ranks 17th on the trading charts with a market capitalization of $ 5 billion.
Technical and fundamental analysis of XLM
The price of the XLM could go up and up in the coming days as the indicators on the technical chart predict a bullish trend. The XLM price is currently trading above the 20-day and 200-day moving averages.
The 200 MA line is at $ 0.248 while the 20 MA line is at $ 0.251, underscoring the uptrend. The relative strength index (RSI) of the cryptocurrency on the charts is 63.30. This signals that the asset is moving into overbought territory on the chart, so now may be the time to buy XLM.
Given the analyst forecast, Wallet Investor believes XLM would hit $ 0.5011 one year and $ 1.50 over the next five years. The prognosis of DigitalCoin is a little lower. According to the website, XLM would hit $ 0.915 over the next five years.
The fundamentals of XLM show that the nonprofit behind the Stellar network, the Stellar Development Foundation, worked.
Recent Bloomberg reports suggest that Stellar is considering acquiring money transfer company MoneyGram. People familiar with the matter say Stellar has partnered with private equity group Advent International to acquire the money transfer company.
However, while the news has not yet been confirmed, it could drive the XLM price up and attract more investors to buy XLM.
The Stellar network, like Ripple, is heavily invested in the development of central bank digital currencies (CBDCs). Numerous companies compete to work on CBDC projects and Stellar happens to be one of them.
Earlier this year, the SDF announced that it had signed a contract with the Ukrainian Ministry of Digital Transformation to work on both a CBDC and a virtual asset infrastructure.
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About Jimmy Aki PRO INVESTOR
Jimmy is a UK-based economist with outstanding hands-on and face-to-face experience in macroeconomic financial analysis, forecasting and planning. He has refined his skills through a cross-continental activity as a financial analyst, which gives him intercultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him to peek under the global hood to see how the world works.
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