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A challenging market phase is presently being navigated by Stellar. The blockchain's activity is revealing a different story, one that may be much more hopeful in the long run even though price action is displaying signs of weakness. The Stellar network processed over 265 million transactions over the past day, which is a 300,000 increase over the daily average for the majority of May and the first part of June.
This spike, in spite of the token's poor price performance, indicates increased usage, perhaps due to enterprise integrations or wider DeFi involvement. XLM is currently trading close to $0.258 after dropping more than 3% during the previous trading session. Short- and midterm moving averages such as the 50 and 100-day EMAs have been breached by the price, and they are currently serving as resistance zones at about $0.28 and $0.27, respectively.
Weak momentum and persistent selling pressure have been confirmed by the RSI's decline to 39.83. However, structural support has not entirely disappeared from Stellar. The long-term 200 EMA is in close proximity and serves as a last line of defense prior to a possible decline to $0.24 or below. This might be more of a consolidation phase than a complete reversal, though, as volume is still largely stable and there is not a capitulation candle in sight.
The discrepancy between price and network activity is what makes this so interesting. Increasing on-chain activity while price lags has historically been a sign of latent demand and a possible breakout when market sentiment changes. For XLM, this might be the case, particularly if it recovers the resistance level at $0.27 and turns it into support. Forecast: In the coming weeks Stellar may see a recovery toward $0.30-$0.32 if network engagement stays high and the price stays above $0.24.
However, XLM will probably fall back to early Q2 levels if support is not maintained. In summary, Stellar is giving conflicting signals. Though usage is rapidly increasing, the price appears unstable. Perhaps the disconnect is merely the prelude to a more significant action.
Vladislav Sopov
U.Today Editorial Team