XLM Price Prediction: 4 Reasons Stellar is About to Jump

XLM price surged for the second consecutive day on Friday, reaching a two-week high as altcoins rallied. Stellar Lumens token soared to $0.4667, and some key fundamental and technical catalysts may push it much higher in the next few days.

XLM Price Has Highly Supportive Technicals

A key catalyst that may drive the XLM crypto price much higher is its highly supportive technicals. The daily timeframe chart shows that the coin formed some highly bullish patterns.

It formed a falling wedge pattern between December and April this year. This pattern is made up of two downward-sloping and converging trendlines. An asset normally forms a bullish breakout when the spread of the two lines narrows.

XLM then formed a double-bottom pattern at $0.2140, its lowest swings in April and July. Similar to the wedge, this popular bullish reversal pattern suggests sellers are unwilling to short below the key support level.

Additionally, Stellar price formed a golden cross pattern, one of the most common continuation signs. This pattern formed on July 13 as the 50-day Exponential Moving Average crossed the 200-day one, pointing upwards.

Most recently, the token formed two patterns concurrently. First, it created a falling wedge, whose two lines neared their confluence this week, triggering a bullish breakout.

Second, the wedge pattern was part of forming the bullish flag pattern. This pattern resembles a hoisted flag. In this case the flagpole’s height is about 60% above the current level. This price is also important as it coincides with the highest level in November last year.

Stellar DeFi Total Value Locked is Surging

The other bullish driver for the XLM crypto price is that it is becoming a big player in the decentralized finance (DeFi) industry. DeFi is an industry that enables transactions that are managed purely by smart contracts. The top industries in DeFi are trading, lending, and real-world-asset tokenization.

Data compiled by DeFi Llama shows that Stellar’s assets in the DeFi industry have gone parabolic and are now sitting at the highest level on record. They jumped to a record high of $151 million, a big jump from less than $10 million in August last year. This growth means that, while the TVL is lower than other chains, it is seeing strong momentum.

Notably, a closer look at Stellar’s ecosystem shows that it is one of the biggest chains in the RWA industry, thanks to its partnership with Franklin Templeton, the $1.5 trillion asset manager.

Futures Market Data Point to Robust Demand

More third-party data indicates more demand, likely boosting the XLM crypto price. For example, there are signs of more demand among traders in the futures market.

XLM’s futures open interest has been in a strong comeback in the past three days. It jumped to a high of $420 million, the highest point since July 23rd, and much higher than this month’s low of $316 million.

The other key financial metric in the futures market is the funding rate. This important data ensures that an asset’s price is aligned with the spot price. This happens because, unlike in the stock futures, perpetual futures don’t have an expiry.

The chart below shows that XLM has had a positive funding rate, indicating that longs are paying shorts. The hope is that the future price will be higher than the spot price.

The XLM price could be preparing for a massive jump in the coming weeks, thanks to its strong technicals and fundamentals. The bullish XRP price forecast will also help its surge because the two correlate closely. It will also benefit from the potential crypto market bull run now that Bitcoin is preparing a strong breakout.