The Stellar Lumens price was in the red on Thursday. For the past week, the coin has been consolidating following its month’s rally. At the time of writing, the altcoin was trading more than 5.72% lower at $0.3384. Its total market capitalization currently stands at $7.87 billion.
Introduction To Stellar
Stellar Lumens currently ranks as the 20th largest cryptocurrency, between Polygon and Ethereum Classic. Stellar is an open source blockchain payment platform founded in 2014. It was co-founded by Jed McCaleb and Joyce Kim, who previously worked in Ripple.
Lumens (XLM) is the native cryptocurrency for Stellar. Stellar is equipped with a Decentralized Exchange (DEX) built into the network. The exchange enables users to send any currency or asset to anyone with a Stellar address anywhere in the world without any transaction fees.
The Stellar Network can also be used to tokenize any currency in the world. It enables its users to exchange any token they hold for any other token on the network. Stellar serves as a bridge that makes it less expensive to trade assets across borders.
The XLM price has jumped more than 167% since the start of the year. However, it is trading nearly 56% lower from its highest point in 2021. Despite its struggle to recover, the coin has been faced with several challenges. Just like most altcoins, XLM’s biggest challenge is Ethereum’s dominance.
Stellar Lumens Analysis
For the past week, the Stellar Lumens price has been trading in a congestion area. The digital asset has been rallying since mid-July, supported by the double bottom pattern formed between June and July. However, the XLM price eased its rally later this month.
On the daily chart, it is trading above the 50 and below the 200-day moving averages. It is also trading below the descending trendline, which is a bearish indicator.
Therefore, the coin is likely to retrace further before bouncing back. A move past the psychological level at $0.4000 will have the bulls targeting this year’s high at $0.800. However, a move below the 50 DMA will invalidate this view.