Stellar (XLM) Network Activity Plummets 50%, But It's Totally Fine

In comparison to past peaks, processed operations have decreased by 50%, indicating a significant decline in network activity at Stellar. In spite of this, the network and asset's general outlook is still largely unchanged. Although historical trends indicate that such declines frequently precede periods of recovery, the decline in activity raises concerns about user engagement and adoption.

According to Stellar's ledger performance chart, processed operations have drastically decreased from a peak of over 600 million transactions per period to about 300 million. Even though this may seem concerning, it is important to take the bigger picture into account. Stellar has previously gone through comparable ups and downs, with each decline followed by a resurgence in interest and uptake. Furthermore, there have been fewer newly created assets on the network, which may suggest that there is less of a need for trustline creation and token issuance. 

Despite brief lulls, the overall count of trustlines and assets is still growing over the long run, indicating that Stellar's ecosystem is still growing. According to the price chart, XLM has held above the crucial $0.36 support level, which corresponds to the 100 EMA. If this level is broken, there may be more losses, and the price may move toward the $0.28 area — which is where the 200 EMA is at the moment. Restoring bullish momentum would be indicated on the upside by a recovery above $0.42 and a subsequent break of $0.47.

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Even though the short-term trend is still unclear, a recovery is still feasible because XLM is displaying resilience above the support. Stellar may see a return to higher levels if investor sentiment improves and network activity levels out. Even though a 50% decline in network activity is noteworthy, Stellar may not be in danger in the long run.

The project's foundation has not changed despite going through similar cycles in the past. XLM appears to be at a pivotal juncture in its price action, and the coming weeks will determine whether it can maintain its current level of support or go into a more significant correction.