Based on a recent post I read here, not a whole lot. (And I'll take the designation of "insane" or "nut" for just a little bit as they so eloquently put it, and full disclosure - I own a nominal interest in XLM, but this is not an attempt at sales. I'm not a financial advisor and am uninterested in changing minds. This is a post purely for sharing thoughts around both fundamental and technical analysis of this coin and project.)
However, I would contend there is something a little more bubbling under the surface based on both fundamental and technical analysis. Let's first start by keeping one thing in mind - markets will range (despite volatility) 80% of the time, and will only trend about 20% of the time. XLM is most certainly situated in a ranging market, and has been for a little while.
It had some promising news released when privacy and security-centric mobile messaging app Signal started nodding at the project. However, it has tech-industry titans engaged with it at present (looking at the IBM global payment system, "World Wire"). Given that the Stellar network is a non-profit organization, slow and steady is the name of the game. When it comes down to what is happening with Stellar, perhaps the best places we should look are at the projects that are partnered with and built on their blockchain.
The critique of a different post had stated that there is nothing happening with this coin on the development end, which I would disagree with. Their developer groups are active on Google, GitHub is updated frequently, and they just released Horizon 2.0 at the beginning of March, and we will have to wait and see what that update to the architecture does for the network itself. Development aside, Stellar is playing it really cool by engaging with strategic partnerships across the financial and technology industries, notably having the Stellar blockchain available and as part of the new line of Samsung Galaxy devices through Samsung Blockchain Keystore, announced 15 July 2020. Samsung's global market dominance with their Android devices goes without saying.
So, while fast-paced and massive changes that we see in other blockchain and coin projects is not exactly evident here with Stellar, it is important to note their approach is in cross-industry engagement and equitable adoption of cryptocurrencies. They achieve this by tapping markets where remittance payments are a large inflow of revenue to various geographical locations. The whole idea behind Stellar (beyond being a fork of Ripple, and then subsequently had their codebase revised since then) started out as a way to bring equity to the world of finances and the opportunity to let people keep their money when sending and receiving remittances. According to Wikipedia, remittance payments from just the United States to Central and South America alone accounts for around 10% of the GDP for receiving countries:
(Stellar was founded in 2014, the stats in 2015 give it a great impetus to keep doing what it is doing.)
These statistics do not even account for all of the remittance payments sent from migrant workers around the UK and EU back to various other countries in the SWANA region or other countries throughout the African continent. You can plainly see where the window of opportunity for crypto to step in and make it work.
So, with all of this in mind, it is no wonder that Stellar is working to create solid partnerships between institutions and the folks on the retail end to 1) make adoption accessible and 2) lay a solid foundation for easy use case. This was made evident with their choice to invest $5 million in Abra last May. The two projects are aligned in terms of values and goals, it was a cultural match made in Heaven. Here is where we can get a better look at "what's happening with Stellar," by looking at what is happening with their supporting projects. Abra just announced "Abra Borrow" is live to consumers and businesses alike. This is huge in terms of the banking project's goals to be a fully-fledged crypto bank. Does Abra leave some things to be desired to the crypto-enthusiast or trader? Of course - but ultimately, it really wasn't built for the "professional," it was built for folks who are outside of the inner-workings of the crypto world.
I digress - the changes at Abra aside...let's talk about StellarX
StellarX is a P2P DEX, in simplest terms. It is an exchange where you can trade tethers between Lumens (XLM) and the listed coins or fiat. If you want to step into Forex (if you are not already in that space) you can trade Forex with StellarX, for nominal fees (just the fee to move the XLM from one wallet to another, to dissuade bad actors from playing around) from one user's wallet to yours and vice-versa by using your XLM to get tethers to BTC, ETH, XRP, LTC, USD, EUR, CHS, Nigerian Naira, Mexican Peso, and more. The DEX also allows you to trade securities there, too.
The tether can be converted to your actual coin or fiat of choice. This is definitely an easy way to make gains in arbitrage since XLM transfers almost instantly and very cheaply.
My fascination with the underlying technology aside - what's the TA on it?
Like I had mentioned at the beginning of the post, markets tend to range about 80% of the time and trend 20% of the time. XLM has been steadily ranging for a while with very little price oscillation. Here is my chart for XLM/BTC on BINANCE (4 hour chart - today, 24 March 2021 - Central Daylight Time - United States/Chicago)
Using the 27 February 2021 as the last "swing high" we can easily see that we are in range. The solid, royal blue line is the SMA-200, the orange and light blue lines are for the Bollinger Bands, and the pink line moving through the price chart is the 9-EMA.
Price alone and the range seen here doesn't tell us a whole lot. The Bands are giving the range a nice squeeze and some volatility is expected. It is in my mind, confirmed by other studies:
What I found interesting in the MACD study (for my purposes is a way to gauge trend and momentum) is that there is bullish "Market Structure*," that is mirrored between it and the price (albeit not as pronounced on the price chart). Even with a dip and people selling off, the lows still are creating an uptrend in the histogram.
When we add in our oscillators (Williams %R and RSI) on top of our volume study (OBV, OBV-EMA on top of volume) - we can see that bullish market structure (the "W" shape) repeated inside of our oscillators, and the volume is staying low. What I can infer with this particular picture, is that growing developments on the blockchain are getting this project going in some good directions, slow and steady, and there appears to be some consolidation happening. Those who bought more mid-late February, really aren't getting rid of it.
I am interested in hearing your thoughts on XLM and where it is headed. Again - I am not trying to sell anything here, this is purely resultant of my curiosity and interest in sharing what I have discovered. Thanks for your time, cheers!
*The concept of "market structure" was introduced to me by way of Brian Beamish with The Rational Investor.
