Stellar Lumens, known for its native digital currency XLM, plunged over 20% from this month’s high on July 24, as investors rushed to lock in profits—but surging on-chain activity and stablecoin adoption suggest the selloff may be short-lived.
Summary
- Stellar Lumens plunged by double digits on Thursday, July 24.
- XLM price may rebound as its transactions and active users jump.
- Its stablecoin supply and volume has jumped this month.
Stellar Lumens (XLM) dropped to a low of $0.400, down by over 23% from this month’s high of $0.5200. This decline also coincided with that of Ripple (XRP), which plunged after an insider sold tokens worth millions.
Why Stellar Lumens may rebound
Still, there are at least three main reasons why the XLM price will rebound, and possibly retest its year-to-date high of $0.5100:
- Stellar transactions and users are soaring.
- Stablecoin volume and transactions are surging.
- XLM price formed a doji pattern, pointing to a rebound.
Nansen data shows that Stellar is one of the fastest-growing players in the blockchain industry. Its transactions jumped by 22% in the last seven days to 2.93 million. It had more transactions than Ethereum (ETH), which processed 10 million.
More data shows that the active addresses jumped by 16% in the last seven days to 208,000. Its network fees jumped by 99% to $73,000, which is notable since Stellar is known for low transaction fees.
Second, XLM price may jump as its stablecoin growth gains steam. Its stablecoin supply has jumped by 15% in the last 30 days to $184 million, while its transaction volume soared by 40% to $1.8 billion. Stellar’s stablecoin addresses jumped by 33% to 260,000.
It’s expected to benefit from President Donald Trump’s signing of the GENIUS Act into law last week, and likely become one of the top processors of USD Coin, a stablecoin.
XLM price has strong technicals
The XLM token price will also rebound after forming strong technicals. On the daily chart, it has formed a doji candlestick, a popular bullish reversal pattern.
A doji comprises of a small body and long upper and lower shadows. It implies that an asset’s price opened and closed at the same price. Additionally, the XLM price has remained above the 50-day and 25-day moving averages, indicating that it has completed its mean reversion.
Therefore, Stellar price will likely continue rallying, with the next point to watch being at $0.5200, its highest point this year. This price target is about 20% above the current level.
