Stellar on-chain activity explodes, signalling a bullish outlook for XLM
- Unique assets on the Stellar network at 38,276, over 6,000 assets have been added so far in September.
- The twenty-sixth largest cryptocurrency by market capitalization, XLM, is yet to recover from the September 7 crash.
- The total number of on-chain trades hit a peak in August 2021, implying high on-chain activity growth.
The drop in Stellar token’s price has been largely influenced by the crash in the overall cryptocurrency market. XLM is primed for a second leg up, as the network’s on-chain activity is on the rise.
DEX trades and volume hit a peak on the Stellar Network in August 2021
Gains posted by Stellar Network’s XLM token were largely erased as the price plunged in the crash on September 7. It is likely that the massive drop was a result of Stellar token’s high correlation with top cryptocurrencies.
XLM correlation with BTC, ETH, LTC and XRP is over 80% based on data from Cryptowatch, a Kraken-owned premium trading terminal.
XLM price witnessed a significant drawdown during the flash crash, alongside cryptocurrencies ranked within the top ten based on market capitalization.
Despite rising on-chain activity on the Stellar Network, XLM price is yet to start its climb.
The total number of unique assets on the decentralized protocol for low-cost transfers is at 38,276. Over 15% of these assets have been added since the beginning of September 2021. The addition of unique assets to the Stellar Network implies that there is a boost in on-chain activity and transfers on the protocol.
Newly created assets on Stellar Network.
Interestingly, the daily active accounts on the XLM Network are on the rise. Nearly 62,762 accounts are active on the decentralized protocol based on data from Stellar Expert, a ledger explorer and analytics platform for XLM.
Jason Chlipala, COO at Stellar Development Foundation (SDF), the organization that supports the development of open-source Stellar has recently said,
Though a key attraction toward the blockchain may be its open, permissionless nature, some firms [banks and financial institutions] may want to work with a closed infrastructure.
By “open” Chlipala meant that assets on Stellar should operate seamlessly across chains.
Stellar’s token has offered moderately high risk-adjusted returns over the past week, and the overall outlook is bullish for the token based on on-chain activity.
It remains to be seen whether XLM price will recover and resume its uptrend towards the 7-day high of $0.42.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
