Can XLM Price Hit $1 as DeFi TVL and Open Interest Soar?
The recent surge in Stellar Lumens (XLM) price has been a topic of interest in the cryptocurrency space, with the coin experiencing a 27% increase from its weekly low and reaching a market capitalization of over $16 billion. This parabolic price action has been fueled by the growth of Stellar’s DeFi ecosystem and its futures open interest reaching a record high. In this analysis, we will explore the factors driving this growth and examine the potential for XLM to hit $1.
Stellar’s DeFi Ecosystem
Stellar’s DeFi ecosystem has been growing rapidly, with Total Value Locked (TVL) reaching a record high of $60.6 million. This growth is a testament to the network’s ability to facilitate fast and low-cost transactions, with an average fee of $0.000014 and a time to finality of virtually zero seconds. The inclusion of Franklin Templeton’s fund assets has further boosted Stellar’s assets, bringing the total to over $300 million.
Futures Open Interest
The surge in futures open interest has also contributed to the growth of XLM price. With a record high of $371 million, just below its weekly high of nearly $400 million, the market’s enthusiasm for the coin is evident. This increase in open interest is a bullish indicator, suggesting that investors are confident in the coin’s prospects.
Technical Analysis
A weekly chart analysis of XLM price reveals a sharp jump in the past few weeks, with the coin crossing several key resistance levels. The neckline of the double-bottom pattern at $0.076 has been broken, and the coin has moved above the key resistance at $0.4400, its highest swing in November 2021. The coin has also moved above all moving averages, indicating that bulls are in control.
Bullish Scenario
With XLM being highly overbought, there is a risk that it could reverse soon. However, a move above the key resistance level at $0.6370, its highest level last week, will point to more gains, potentially to its all-time high of $0.7960. If it crosses that level, it will jump to $1, doubling from the current level. This bullish scenario will depend on whether Bitcoin continues its strong uptrend and crosses the key level at $100,000.
Conclusion
The growth of Stellar’s DeFi ecosystem and futures open interest has been a significant factor in the recent surge in XLM price. While there is a risk of a reversal due to overbought conditions, a move above the key resistance level at $0.6370 could point to more gains, potentially to $1. The outcome will depend on the performance of Bitcoin and the overall market conditions.
Predictions
Based on the analysis, we predict that XLM price will continue to rise in the short term, potentially reaching $0.6370 and breaking above the all-time high of $0.7960. If Bitcoin crosses the key level at $100,000, we expect XLM price to jump to $1, doubling from the current level.
Key Takeaways
- Stellar’s DeFi ecosystem has been growing rapidly, with TVL reaching a record high of $60.6 million.
- Futures open interest has also surged, reaching a record high of $371 million.
- XLM price has broken several key resistance levels, including the neckline of the double-bottom pattern at $0.076.
- The coin has moved above all moving averages, indicating that bulls are in control.
- A move above the key resistance level at $0.6370 could point to more gains, potentially to $1.
- The outcome will depend on the performance of Bitcoin and the overall market conditions.
