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Stellar Price Gains Rests on 5 Factors – 61.8% Fibs Identified as Key Resistance Level

Indicators calling out to the bulls - will the bears recede?


Stellar (XLM) – Now the 6th Largest by Market Cap

In mid-July, we saw Stellar (XLM) surpass Litecoin (LTC) to become the 6th largest cryptocurrency by market capitalization. At $4.1 billion market cap, the cryptocurrency shows promise of further upside. Both fundamental and technical factors indicate brighter days ahead.

Fundamental Upsides

On the fundamental side, factors that should help in boosting Stellar price currently include:

  1. IBM’s partnership with Stronghold to create a Stellar blockchain network-based stable coin backed by US dollars.
  2. The proposed Lightning Network implementation of the Stellar network by December.
  3. The cryptocurrency payment network Tempo – backed by Stellar’s network – is on track to create the largest payment network of any licensed cryptocurrency exchange globally.
  4. Stellar Lumens [XLM] is now the third most popular cryptocurrency for Bitcoin IRA. Bitcoin IRA is a platform that combines digital assets with individual retirement accounts. The platform currently supports 8 cryptocurrencies: Bitcoin (BTC), Ethereum (ETH) Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), Ethereum Classic (ETC),  Stellar Lumens (XLM) and Zcash (ZEC).
  5. Stellar has also received certification from Islamic scholars for its blockchain platform and related cryptocurrency, aiming to integrate the technology into the field of sharia-compliant financial products. The certification covers Stellar’s blockchain and its native currency called Lumens. The sharia-compliant status should help in extending the Stellar digital ledger’s utility beyond cross-border payments, to areas such as asset digitization, especially in growth markets in the Middle East and Southeast Asia.

The above factors should help boost demand and value of Stellar’s digital ledger and cryptocurrency (XLM). There are also technical indicators calling out to the bulls.

Stellar Price Analysis – Technical Indicators for the Bulls

Stellar (XLM) price is at a very interesting point right now. The recent downtrend in price (indicated by the downward sloping dark green line in the chart above) seems to be changing course now. Technical indicators see the bears receding with the price no longer making lower lows. Trading volume in Stellar has also picked up in pace since the currency took over as the 6th largest by market cap in mid-July.

We did a quick Fibonacci retracement analysis on XLM’s recent price wave; identifying a low of $0.18 and a peak of $0.33. Now, the 61.8%, 100%, and 161.8% Fibonacci levels are good places to mark an entry point. Accordingly, the golden ratio of 61.8% which marks the $0.24 price level for Stellar (XLM) is the key critical price to watch at this point.

Given the probable reversal in Stellar price downtrend, investors who miss the bargain sale that’s on currently, find XLM meeting resistance at the $0.24 price level. Thus, the 61.8% level currently marks a good entry point to watch out for. This rests on the likelihood that the bulls do make an appearance. Investors must, however, keep in mind that the RSI (Relative Strength Index) of around 40 currently, points to weak strength in movement. A confirmed reversal may need greater strength.

Image Credit: Deposit Photos