Stellar Lumens (XLM) surges 6%... Will it succeed as a new dollar payment network?

▲ Stellar Lumens (XLM) ©

Stellar Lumens (XLM) showed an above-market average surge, driven by the launch of the cross-chain stablecoin USDT0 and easing concerns about a US interest rate hike.

According to cryptocurrency market data aggregator CoinMarketCap on September 3 (local time), Stellar Lumens rose 6.5% over 24 hours to reach $0.185. During the same period, the total cryptocurrency market capitalization increased by 4.97%, and XLM trading volume surged by 56.75%, supporting the expansion of buying interest.

The most direct upward driver was USDT0, launched on the Stellar network on September 2. USDT0 leverages LayerZero's interoperability technology to connect Stellar's payment network with Tether's $180 billion liquidity across more than 25 blockchains. It is expected to enhance Stellar's remittance and decentralized finance (DeFi) utility by allowing stablecoins to be moved without going through separate liquidity pools for each chain.

In particular, its potential use as a new dollar payment network in regions where Stellar has expanded its payment and remittance businesses, such as Latin America and Africa, has garnered attention. Increased network usage could positively impact the demand for XLM, which is used for fees. The market is closely watching initial usage and the volume of USDT0 liquidity inflow on integrated platforms such as Kraken, Bitget, and SushiSwap.

The macroeconomic environment and a technical breakthrough also contributed to the surge. Risk asset preference recovered as concerns about a September interest rate hike eased following remarks from Christopher Waller, a governor of the U.S. Federal Reserve (Fed). XLM tested the 50% Fibonacci retracement level of $0.187 after surpassing its 30-day Simple Moving Average (SMA) of $0.172. The social media net sentiment index also recorded 5.16 out of 10.

The short-term outlook depends on whether it breaks past $0.187. If it maintains an upward trend above this price, further strength can be expected, but failure to break through could see it fall back to $0.172, where the 30-day Simple Moving Average is located. The presented analysis indicated a 61.8% Fibonacci level at $0.179, but this is numerically inconsistent as an additional upside target, being lower than $0.187. Ahead of the U.S. August Consumer Price Index (CPI) announcement on September 11, the actual inflow of USDT0 liquidity and whether it settles above $0.187 will determine its future direction.

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