Stellar Lumens price continued to rise on Monday as Bitcoin surpassed the resistance at $101,000 and the crypto fear and greed index shifted to the greed zone.
Stellar (XLM) reached $0.4630, experiencing an increase of nearly 50% from its December low, as previously predicted.
This rally occurred as most cryptocurrencies rebounded. Bitcoin (BTC) recovered from its low of $92,000 last month and reached $101,500, while tokens such as Injective, SPX6900, Worldcoin, and Render surged by over 10%.
Stellar’s gains were also influenced by the bullish momentum of Ripple (XRP). Ripple recently formed a bullish pennant pattern, indicating potential further gains. Some analysts anticipate that Ripple will surge to $100, which would be a 4,066% increase from the current level.
XLM often mirrors the performance of XRP due to their shared history and similar roles in the crypto industry. Jed McCaleb, the founder of Stellar, was a key founding member of Ripple.
However, Stellar’s network faces significant challenges. The first major issue is its stagnant ecosystem, which does not justify its $13 billion market cap. The network currently only hosts 11 dApps in its DeFi ecosystem, with a total value locked of $53 million.
In contrast, Base, a layer-2 blockchain launched in 2023, has accumulated over $3.87 billion in assets and $3.7 billion in stablecoin volume. Despite positioning stablecoins as a core feature, Stellar only has $161 million in stablecoins on its network.
Stellar price analysis:
The daily chart reveals that Stellar’s price peaked at $0.6376 in December before reaching a low of $0.300, aligning with the lower boundary of the Murrey Math Lines trading range.
Since then, XLM has formed a falling wedge pattern, which is a bullish chart formation. The token has broken above the upper boundary of the wedge and a key support and resistance pivot point.
Stellar remains above the 50-day moving average and the Ichimoku cloud indicator, indicating continued bullish momentum. The next critical resistance target for bulls is $0.6375, representing a potential 40% upside from the current price. However, if the price drops below the $0.30 support level, it would invalidate the bullish outlook.