Stellar (XLM), Will it rise further on the back of stablecoin growth?

▲ Stellar (Stellar, XLM)/AI Generated Image ©

As Stellar (XLM) rose over 14% this week, recovering its 200-day Exponential Moving Average (EMA), record-high stablecoin market capitalization and an increase in Total Value Locked (TVL) are supporting the expansion of on-chain activity and fueling expectations for further gains.

According to investment media FXStreet on July 3 (local time), Stellar traded above its 200-day EMA of $0.197, rising over 14% this week. The media outlet analyzed that improving on-chain metrics, such as stablecoin market capitalization reaching an all-time high and TVL steadily increasing, are supporting the price recovery.

According to DefiLlama data, the stablecoin market capitalization of the Stellar network reached an all-time high of $4.83498 billion on July 3. This signifies the continuous expansion of liquidity and stablecoin utilization within the network, and was evaluated as a positive factor for long-term price prospects. Additionally, TVL increased from $199 million on Monday to $223 million on Friday this week. The media outlet explained that ecosystem activity is strengthening as more users are depositing or utilizing assets in Stellar-based protocols.

Technically, a short-term bullish trend continues. Stellar traded above the $0.186-$0.197 range, where the 50-day, 100-day, and 200-day EMAs are formed, showing buying interest during pullbacks. The Relative Strength Index (RSI) maintained a neutral-to-bullish trend at 53, and the Moving Average Convergence Divergence (MACD) moved near the 0-line, suggesting a phase of price stability rather than a strong breakout.

On the upside, $0.200, the 61.8% Fibonacci retracement level, was presented as the primary resistance. Subsequently, $0.218, $0.237, and $0.260 were cited as additional resistance levels. Conversely, on the downside, the 200-day EMA at $0.197 is the first support level, followed by the 50-day EMA at $0.190 and the 100-day EMA at $0.186. The media outlet predicted that if further corrections occur, the support at $0.177 and $0.173, and subsequently $0.142, will be crucial.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*