Stellar (XLM): Revolutionizing Global Financial Transactions with Lumens and Blockchain Technology

By Yvonne Zhang | Crescent City Capital Market Analyst Intern

Introduction to Stellar (XLM)

Stellar, also known as Lumens (XLM), is a decentralized peer-to-peer network established by the Stellar Development Foundation in 2014 and officially launched in 2015. It aims to connect various financial systems globally, streamlining the process of international money transfers. Stellar is renowned for its capability to facilitate quick and inexpensive financial transactions.

Stellar’s Native Currency: Lumens (XLM)

The Stellar network operates with its native digital currency, XLM or Lumens. Lumens serve a dual purpose on the network: they act as an intermediary for currency conversions and are used to pay transaction fees. This functionality is central to Stellar’s operation, enabling efficient and cost-effective transactions.

Stellar’s Payment Protocol and Exchange System

Stellar leverages distributed ledger technology to manage its transactions, focusing on individual users’ ability to transfer money globally. The platform includes a decentralized exchange and marketplace with an integrated order book that tracks asset ownership. Users can manage transactions and trade various cryptocurrencies within the platform.

Security and Target Audience

Stellar places a high emphasis on security, implementing measures to prevent malicious attacks and ensure efficient processing of transactions. The primary audience for Stellar includes individuals in developing countries, offering them easy access to global financial systems through affordable and rapid transactions.

Features and Capabilities of Stellar

Stellar supports multi-currency transactions, making it particularly useful for trading less commonly paired currencies. The network utilizes “Anchors” to facilitate smooth currency exchanges, enhancing the speed and efficiency of transactions. Additionally, Stellar is recognized for its low transaction costs and significant partnerships, including with IBM for the World Wire project.

Circulation and Network Security

Initially, Stellar had issued 100 billion XLM, but this was later reduced to 50 billion, with about 20.7 billion in circulation. The network’s security is maintained using the Stellar Consensus Protocol, ensuring decentralized control and robust security features.

Stellar’s Market Presence and Partnerships

Stellar is available for trading on various top cryptocurrency exchanges, such as Binance, Coinbase, and Kraken. The Stellar Development Foundation has formed strategic partnerships globally, including with traditional payment processors like MoneyGram. These collaborations aim to integrate fiat and digital currencies, enhancing Stellar’s presence in the blockchain and cryptocurrency sector.

Focus on Blockchain-Powered Payment Services

Stellar continues to focus on integrating cryptocurrencies into traditional cross-border payment systems. Its roadmap and partnerships are strategically aligned to improve global adoption of cryptocurrencies, particularly in the realm of international money transfers.

Recent Updates

The live Stellar price today is $0.114600 USD with a 24-hour trading volume of $52,513,139 USD. We update our XLM to USD price in real-time. Stellar is down 0.61% in the last 24 hours. The current CoinMarketCap ranking is #25, with a live market cap of $3,252,037,107 USD. It has a circulating supply of 28,377,387,233 XLM coins and a max. supply of 50,001,806,812 XLM coins.

Analysis: In the recent period, the price of Stellar (XLM) has exhibited pronounced volatility, with its value fluctuating between $0.1163 and $0.1216. This pattern of fluctuation is a hallmark of the cryptocurrency’s current market phase. A particularly noteworthy aspect is the sharp decline Stellar experienced since January 3rd, a movement that signifies a significant shift in market dynamics. This decline has led to the formation of what appears to be a support range between $0.1144 and $0.1160. The establishment of this support area is a critical development, as it indicates a level where the market sentiment is changing, with buyers coming in to purchase at these lower prices, thereby preventing the value from dropping further.

This behavior in Stellar’s market has implications for trading strategies. The establishment of the support range provides a potential strategic entry point for short-term trading. Considering the lower boundary of this range and the market’s reaction to this level, an entry point around $0.11 could be strategically advantageous. This price point is slightly below the observed support range, allowing for entry just before the market potentially rebounds from these levels.

For those considering a short-term trading strategy, it’s equally important to establish an exit strategy. Given the current market trends and the levels at which Stellar has been trading, setting a target around $0.13 for exiting the trade appears reasonable. This target is based on recent price behaviors and the potential for the currency to rebound to higher levels, following its support level activity.

In a long-term market analysis of Stellar (XLM), the observation of $0.1187 as a pivotal point is significant. Historically, this price level seems to act as a crucial threshold in Stellar’s market behavior. When the price of Stellar breaks above $0.1187, it often indicates a shift towards an upward momentum. This pattern, discerned from historical price data, suggests that surpassing this level may lead to sustained price increases over time. Therefore, from a long-term investment perspective, considering an entry point around $0.1187 could be strategically sound. This approach is based on the assumption that crossing this threshold might trigger a bullish trend for Stellar.

However, when setting long-term investment goals, particularly an exit point, it’s essential to be mindful of the ambitious nature of certain targets. Setting a long-term exit point at around $0.5, for instance, represents a scenario where Stellar would need to undergo a significant increase in value. While not impossible, such a substantial rise would likely require major shifts in market conditions. These could include broader adoption of the Stellar network, significant technological advancements, impactful partnerships, or favorable regulatory developments in the cryptocurrency sector.

It’s crucial to approach such ambitious targets with caution. The cryptocurrency market is influenced by a wide array of factors, including global economic conditions, investor sentiment, technological developments, and regulatory changes. These factors can lead to high levels of volatility and unpredictability in prices. Therefore, while $0.1187 could be considered a reasonable entry point based on historical trends, the exit point of $0.5 should be viewed as an optimistic scenario, contingent on favorable market conditions and developments within the Stellar ecosystem.

Reference:

https://coinmarketcap.com/currencies/stellar/

https://www.bitpanda.com/academy/en/lessons/what-is-stellar-xlm/

https://vegavid.com/blog/build-stellar-app-from-scratch-step-by-step-guide/