Seize the weak point of the Stellar Lumen value as a chance to purchase – InvestorPlace
The last time I saw Stellar Lumens (CCC:XLM-USD) I said, “Be careful before investing your savings in cryptocurrencies. Many of these digital currencies are grossly overwhelmed, including XLM … don’t buy it yet. Wait until it withdraws. “
That was on February 12th when XLM was trading around 46 cents. By March 25, it had dropped to 35 cents. Then it rose to 74 cents before falling to today’s price of 42 cents.
Thank you China and Elon Musk for the mess.
Musk, for example, said he would no longer accept bitcoin for Tesla car purchases, citing the “rapidly increasing use of fossil fuels for bitcoin mining,” as quoted by CNBC. China then made things a little more “fun” by banning institutions from trading cryptocurrencies. Apparently they are concerned about possible fraud and money laundering.
However, don’t count out oversold cryptocurrencies like XLM just yet.
The difference between stellar and lumen
Stellar refers to the network and the community. XLM is the currency that powers this network, which, according to Blockchain.com, “users can send and receive and use to exchange between other currencies”.
While most of you already know this, it is always best to clear it up.
Stellar Lumens technology could help billions who are not considered bankrupt
Stellar’s market could be sizeable.
Stellar “enables people to create, send, and trade digital forms of money … all designed so that all of the world’s financial systems can work together on a single network,” as I discovered on February 12, banking days will take big Process transactions with high transaction fees. However, with Stellar, the same tasks can be performed almost instantly at a lower cost. It also enables cross-border transactions between any currency. “
Second, Stellar could be a game changer for the estimated 1 billion households considered to be bankless. That means they don’t have access to traditional banking. You can’t get credit cards, transfer money, or even have an account.
Stellar lumens could make a stellar comeback
After finding support in February, XLM became severely oversold.
If you look at a two year chart you can see how oversold it is by looking at Relative Strength (RSI), MACD and Williams% R. See what happens every time these three technical indicators converge in the oversold and overbought areas. About 80% of the time we will see a pivot in the other direction shortly thereafter.
Institutional interest also seems to grow with XLM. According to Ali Martinez, a contributor to Crypto Briefing, in April, “Grayscale has started a buying frenzy, adding upward pressure on the token for cross-border transfers. The world’s largest asset management company for cryptocurrencies collected 5,566,271 XLMs worth around 2.5 million US dollars last month. “
The conclusion to XLM
While cryptocurrencies have become very volatile thanks to China and Elon Musk, we will see a good rebound from recent lows. Plus, not only are we still seeing interest from retailers and institutions, but we’re also seeing great global adoption of cryptocurrencies.
For example, according to FX Empire, “JPMorgan, Goldman Sachs and Morgan Stanley are already heavily involved in the market. Other leading banks looking to get into the market are Citigroup, UBS, Cowen, and Deutsche Bank. BNY Mellon will offer cryptocurrency custody services to its customers through its new digital asset unit in Dublin. “
With cryptocurrencies just beginning to recover, I firmly believe that XLM could be one of the standout winners. It doesn’t hurt that XLM is also excessively oversold and ready to swing higher. In the short term, I would like to reduce XLM from the current 42 cents to 75 cents.
At the time of this writing, Ian Cooper held positions (neither directly nor indirectly) in the securities discussed in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s posting guidelines.
Ian Cooper, an InvestorPlace.com employee, has been analyzing stocks and options for web-based advice since 1999.