Stellar ( XLM ) has been on watch the last couple days. During trading the last 24 HR, XLM has continued to trend upwards despite a majority of the cryptocurrency market selling off. The last 24 HR, XLM has run +3.70% compared to Bitcoin price seeing a decline of -0.10%. During the last week, XLM price has rallied +8.14%. On the flip side, Bitcoin price has been relatively stable, increasing only +0.46%. With a majority of altcoins usually being highly correlated to Bitcoins price action, we took a look at Stellar to see what could be causing the outperformance.
Stellar Transaction Outperformance
Aside from XLM technical analysis, the transaction output this month has been quite impressive. As Visionary Financial recently shared on Twitter, Stellar has been an outlier this month in terms of transaction output. When looking at the top 3 cryptocurrencies by market capitalization, Stellar has been pumping out a lot more transactions this month compared to Bitcoin, Ethereum, and XRP. The chart below displays daily transaction output for this month. Stellar has been doing around 3X-4X more transaction output than Bitcoin on a daily basis this month.
The exact “utility” behind these transactions is still of question. This trend hasn’t only occurred this month. Among Bitcoin, Ethereum, and XRP, XLM has been consistently leading transaction output since early February of this year. The CEO of Stellar announced a fairly large XLM donation program at the beginning of April to provide COVID-19 aid, but that obviously doesn’t explain February and March. The program intends to donate 2.5 million XLM to several different charities.
Stellar ( XLM ) Technical Analysis
As stated above, XLM has gained +3.70% the last 24HR and +8.14% the last week. It’s always important to look at the potential drivers behind altcoins that are outperforming Bitcoin, since most altcoins will tend to be highly correlated to Bitcoins price action
50 Day Moving Average: XLM has been in consolidation mode the last couple days. During this time, it’s been flirting with the 50 day moving average ( red line ). If you look at historical price action, XLM has rallied pretty hard after surpassing the 50 day moving average.
Consolidation Phase: XLM price has has 2 solid “consolidation phases” since December 2019. Both events resulted in rallies to the upside.
- 1st Phase ( December 2019 ): +33% run
- 2nd Phase ( March 2020 ): +29% run
If XLM can surpass resistance levels that currently sit around $.0532, it could result in upward momentum. The setup looks very similar to the previous rallies in term of that nice consolidation phase forming. Chartist will usually tell you that “the longer the consolidation, the harder the rip.” This setup is a bit shorter than the previous 2, but XLM price could very well test $.065 to the upside ( +25% ) if resistance can be surpassed in the near term.
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