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

▲ Stellar (Stellar, XLM)/AI generated image ©

Stellar (XLM) surged over 14% this week, recovering its 200-day Exponential Moving Average (EMA). The all-time high in stablecoin market capitalization and an increase in Total Value Locked (TVL) are supporting expanded on-chain activity, fueling expectations for further price increases.

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 analyzed that improving on-chain indicators, 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 on the Stellar network hit an all-time high of $4.83498 billion on July 3. This indicates a continuous expansion of liquidity and stablecoin utilization within the network and is considered 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 explained that ecosystem activity is strengthening as more users deposit or utilize assets in Stellar-based protocols.

Technically, a short-term bullish trend continues. Stellar traded above the $0.186-$0.197 range formed by the 50-day, 100-day, and 200-day EMAs, showing buying interest during corrections. 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 period of price stability rather than a strong breakout.

On the upside, the 61.8% Fibonacci retracement level of $0.200 was presented as the primary resistance. Subsequent resistance levels were identified at $0.218, $0.237, and $0.260. Conversely, on the downside, the 200-day EMA at $0.197 serves as the first support, followed by the 50-day EMA at $0.190 and the 100-day EMA at $0.186. The media predicted that in case of further corrections, the support at $0.177, $0.173, and then $0.142 would be crucial.

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