Stellar Lumens (XLM), the native cryptocurrency of the Stellar blockchain, has been on a tear this month, defying gravity with an eye-watering rally. XLM’s impressive performance has transformed it from an undervalued asset to one of the top performers of 2024.
Explosive Price Surge
From its lowest point on November 2nd to its peak on November 23rd, XLM rocketed a staggering 61%. This surge extended its weekly gains to a phenomenal 235%. Looking at the bigger picture, XLM has rallied a remarkable 600% year-to-date, solidifying its position as one of the best-performing major cryptocurrencies.
A Remarkable Turnaround
The recent rally is particularly noteworthy considering XLM’s position at the beginning of November. The cryptocurrency languished near historic lows, seemingly forgotten. However, the tide quickly turned, propelling XLM closer to its all-time high (ATH) from 2021.
Derivatives Market Reflects Bullish Sentiment
While XLM’s price action grabbed headlines, another key area witnessed a historic development. Open interest in XLM derivatives on major exchanges skyrocketed to a record-breaking $443.99 million in the past 24 hours. This dwarfs the previous peak of $180 million set in April 2021. Furthermore, XLM derivatives trading volume soared to an impressive $10.17 billion during the same period, according to data from Coinglass.
The confluence of surging open interest and robust spot demand created the perfect storm for XLM’s explosive rally. However, other factors may have contributed to the sudden shift in sentiment.
News emerged recently that the Stellar blockchain is poised to support the Federal Reserve’s FedNow initiative. This potential integration could usher in a significant surge in utility for the Stellar network, potentially driving further demand for XLM tokens. This development could explain the explosive demand and subsequent price increase witnessed towards the end of the week. The potential for future integration also fuels optimism for continued demand in the coming weeks, as investors may choose to hold (HODL) XLM in anticipation of further price appreciation.
Also Read: Jed McCaleb: Stellar (XLM) Undervalued Despite 478% Surge in November – What Sets It Apart?
Despite the bullish sentiment, a short-term pullback remains a possibility. At the time of writing, XLM’s technical indicators suggest the asset is significantly overbought. However, considering XLM’s recent defiance of expectations, it’s not inconceivable that the rally could extend into price discovery territory in 2025, or even sooner.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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