The cryptocurrency market has posted a minor recovery at the beginning of this trading week, the price of Bitcoin is above $7 500 and all other cryptocurrencies have also advanced in value. The current price of Stellar (XLM) stands around 0.046 and at this value the total market capitalization of this coin is around $934 million. Stellar is a platform with a mission to connect payment systems, people and banks. This platform enables money to move directly between people, companies and financial institutions as easily as email. Stellar has its own cryptocurrency known as Lumens (XLM) and it is important to say that transactions on this network resolve in 2-5 seconds and at almost no cost. According to the Stellar team, the availability and active use of lumens on the network will increase the network’s utility by many orders of magnitude. Users will need to buy lumens in the future to cover base fees for transactions on the network and according to analysts, this is one of the reasons why this cryptocurrency has a bright future. Stellar has been increasingly adopted by banks and payment networks, even some big companies have the interest to accept this cryptocurrency, some important names include IBM and KlickEx. The future actually looks bright for Stellar but investors should have in mind that Stellar isn’t the only privacy coin competing for market share and some other cryptocurrencies could potentially limit the adoption of Stellar. We can also not forget that regulations on the cryptocurrency market can actually be a threat to this cryptocurrency. Stellar is decentralized and not controlled by a single association but like most of the other cryptocurrencies, Stellar (XLM) has also weakened in value last several months. In my opinion, this is a still risky coin, its future is still not sure and it is really hard to measure the current potential of this cryptocurrency. Many currently used coins have limited support, outside of major crypto-exchanges and this is also the situation with Stellar. Because of that, I would recommend to everybody to be careful and to invest a small sum of money in this cryptocurrency. In the chart below (a period from January 2019), I have marked major resistance and support levels which can help us to understand where the price could move. The current resistance levels are $0.06, $0.07 and $0.10, $0.04 represents the strong support level.
We can also notice that December has been a very negative month for this cryptocurrency so far and the price is still moving in the downtrend. Stellar remains in the bearish phase but if the price advances above $0.10 it could be a good sign of the trend reversal. If the price drops below $0.04 strong support that would be a strong “SELL” signal and the open way to $0.03.
Recommendation: The last several months have been very negative for the cryptocurrency market, all major cryptocurrencies have weakened and the price of Stellar is also pressured by this situation. It is very hard to explain the actual value of Stellar (XLM) and because of that, I would recommend everybody to be careful with investing in this cryptocurrency. If the price jumps above $0.10 that could be a very good opportunity for the short term traders, short-term traders can put the stop-loss at $0.08 and take profit at $0.15 or above. The strong support level of this cryptocurrency stands around $0.04 but according to technical analysis, the downtrend is not over yet.