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29 Mar 2022


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What is Stellar (XLM) and how does it work?

Stellar is an open network for storing and moving money that allows you to create, send, and trade digital representations of all forms of money: bitcoin, dollars, and pounds. Originally launched in June 2014 with the goal of boosting financial inclusion by reaching the world's unbanked, Stellar crypto decided to shift its focus on helping to connect financial firms with one another through blockchain technology.

Stellar's network's native token, stellar Lumens (XLM), is used as a bridge to make tracking across borders less expensive, as opposed to existing payment providers that often charge high transaction fees for the same service. Stellar XLM was originally based on the Ripple protocol, but later, as a result of a fork, it created its own blockchain with a subsequently rewritten code.
What has made Stellar crypto so unique, has been its low transaction costs. Traditional cross-border payments are generally high in costs, with fiat-based payments solutions such as PayPal being a primal example, and similarly with congested blockchain networks such as Bitcoin and Ethereum. With stellar coin on the other hand every transaction costs just 0.00001 XLM (much less than $0.01), making it more affordable and a better means to transact.

Additionally, XLM crypto managed to secure partnerships with big-brand technology companies and fintech firms, such as teaming up with IBM to launch World Wire, a project that allowed large financial institutions to submit transactions to the Stellar network and transact using bridge assets such as stable coins. Unlike many other blockchains that have community funds, meaning that projects that help further the ecosystem can be sponsored, Stellar allows its users to vote on which ventures should be given this support, making it a more fair community approach.

Coin Analysis

Last update 28/3/2022
XLM stellar lumens was originally launched on Binance towards the end of 2019, continuing a sideways move that had been going on for several months beforehand. During this period the crypto was ranging between $0.03 and $0.09, and making somewhat of an upward movement. However, it wasn't until the following year that Stellar XLM price would rise significantly, breaking the highest price around $0.011 and skyrocketing all the way above $0.8 and showing growth of over 450%, being one of the best performing coins of the year.
XLM/BUSD weekly candle chart with supports, resistance and 20/50/100 EMA key level
XLM/BUSD weekly candles chart
Stellar Lumens price has since cooled off and gone through some sort of a retracement over the last few months. After reaching its all-time high towards May 2021, the following months it failed to recapture this level and has trended gradually downwards ever since. In these months Lumen traded between the local support price of $0.22 and the resistance level of $0.4, both of which had been reached on several occasions but never breached. Over the last few weeks, in early 2022, XLM has dipped shortly below the support level, just to get back above it in the following days; it currently sits around this price.

XLM price prediction would suggest that Lumen does seem to have bottomed out, however, it's too early to tell. Prices are regaining the support level now turned resistance. This is a key first level that needs to be reached for prices to bounce above it and move towards more strong upper resistances. If prices manage to stay above this level, and perhaps follow a break and retrace pattern, we could see higher price levels really soon for Lumen.
XLM is available for trading on dApp.

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Author: Matteo Poole