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 sixth largest crypto coin with a market cap of $4.6 billion.
Even though XLM is currently trading at $0.2, recent developments promise to push its price even higher. 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.
The active candle for XLM price for the week is poised to end higher, trading off the week’s open price at 21.2 cents. This move was not exactly off the support level, but is now approaching the long term descending resistance line at 27.3 cents—you can monitor all lines on Binance and other exchanges with built in Tradingview graphs.
XLM/USD Weekly Chart: October 20, 2018
The descending trendline resistance is expected to continue to resist price action, in the absence of major positive cryptocurrency news. The key level of support also continues to remain viable, and together, these key levels look set to continue to remain the borders of price action, even as price action marches steadily to the point of convergence of the trendlines.
The daily chart, which is a measure of the medium-term price outlook, paints a clearer picture for XLM price. In addition to the trendlines which border price action, we also see the presence of the horizontal resistance 1, which is a price at which resistance was met earlier in the month. This resistance line is also expected to merge with the descending trendline resistance line at the 26.24 cents price level.
XLM/USD Daily Chart: October 20, 2018
Price action will therefore have to contend with this price area, and this is expected to occur next week. So what are the possible trade scenarios for traders wishing to trade the XLM/USD crypto pair?
Trade Scenario 1
The bullish momentum seen on the XLM/USD pair this week is going to run into strong headwinds next week. The 26.24 cents resistance area will be key to price action. XLM price will need to break this price level to the upside for any bullish momentum to be sustained. Such a move must also be accompanied by an increase in buying volume to be considered valid. If one of next week’s price candles/bars is able to close above the 26.24 cents resistance area by at least a 3% penetration, then the door will be opened for price action to make a run at the 2nd resistance level at the 31 cents area. A look at the daily chart will show that trading volumes are very thin. Next week will be crucial to price action as far as the test of the immediate resistance areas is concerned.
Trade Scenario 2
If buying volumes continue to remain as they are, it is a sign that there will not be enough buying momentum to push the market above the 26.24 resistance area. If this is the case, there will be tests of the resistance area followed by a price retreat, in which case price will start to move downwards, possibly targeting the support area in what could be a drawn out move. A look at the price action on the daily chart for September and October will reveal that it took approximately 2 weeks for price action to move from support to resistance and back again. So if price action were to be rejected at the resistance and trend downwards towards the support area, it is going to take a while.
The long-term, mid-term and short-term outlook for XLM price on the XLM/USD pair is:
- Long-Term – neutral to bearish
- Mid-term – neutral
- Short term – neutral
Please note: this analysis was done on weekly charts, where a week’s price action is represented by a single candle. Therefore, the price moves described will take some time to play out. Traders should be aware of this before they set up trades.