Stellar (XLM) has experienced a significant breakout, climbing to $0.4630—an impressive 50% gain from its December low. This price rally aligns with the broader recovery observed across the cryptocurrency market. Bitcoin (BTC) rebounded from its December low of $92,000 to surpass $101,500, while other tokens such as Injective, SPX6900, Worldcoin, and Render posted gains exceeding 10%.
Stellar’s price increase was further supported by Ripple’s bullish performance. Ripple (XRP) recently formed a bullish pennant pattern, often signaling continued price growth. Analysts speculate that XRP could rise dramatically, potentially reaching $100—a staggering 4,066% increase from its current price. Given Stellar’s close connection to Ripple—founded by former Ripple co-founder Jed McCaleb—XLM frequently mirrors XRP’s movements, amplifying its bullish momentum.
Despite this rally, challenges remain for Stellar’s network. A key concern is the ecosystem’s lack of growth, which questions the justification of its $13 billion market cap. Currently, Stellar’s DeFi ecosystem is modest, hosting only 11 decentralized applications (dApps) with a total value locked (TVL) of just $53 million. By comparison, Base, a layer-2 blockchain launched in 2023, has outpaced Stellar significantly, boasting $3.87 billion in assets and $3.7 billion in stablecoin volume.
While stablecoins are marketed as a core feature of Stellar’s ecosystem, the network holds just $161 million in stablecoins—far below its competitors in the industry. This gap highlights the uphill battle Stellar faces to position itself as a prominent blockchain in the decentralized finance space.
On the technical side, Stellar’s recent breakout has drawn attention to its bullish chart patterns. The token peaked at $0.6376 in December before falling to $0.300, which aligned with the lower boundary of the Murrey Math Lines trading range. Since then, XLM has formed a falling wedge pattern—a technical indicator typically associated with potential upward price movement.
Breaking above the wedge’s upper boundary, Stellar has also surpassed a critical support-and-resistance pivot point. The token now remains above its 50-day moving average and the Ichimoku cloud, both of which suggest sustained bullish momentum.
For Stellar bulls, the next key target is $0.6375, a level that represents a 40% increase from the current price. However, if the price were to drop below the $0.30 support level, it would invalidate this bullish outlook and potentially lead to further declines.
While Stellar’s rally has reignited optimism among its investors, the network’s long-term success will depend on addressing its ecosystem’s stagnation and increasing its competitive edge in the fast-evolving blockchain space.