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Stellar’s Flippening: XLM Drops Four Spots in Crypto Market Ranking Since November

Stellar’s free fall in the crypto market rankings continued on Sunday, as XLM approached “basically worthless” levels following multiple technical breakdowns. Although Stellar’s performance has mostly followed its large-cap peers, the market for financial platforms appears to be crowded with XRP driving much of the demand.

Stellar’s Decline

Lumens was back on the defensive Sunday, falling 4.7% to $0.0968. That was the lowest since Dec. 15. Trading volumes were a hefty $127.5 million, not unlike the past seven days. Binance was the single largest market, accounting for roughly 13% of the daily transaction volumes.

In terms of technical levels, XLM’s next target is $0.0653. Below that, the bears could force a test of $0.0015, or “basically worthless” levels, according to crypto analyst Peter Brandt.

Lumens has been in a sustained bear trap stretching all the way back to May 2018. The cryptocurrency has printed a series of lower highs over that stretch, including the so-called ‘FOMO bull trap of November. Since Nov. 19, XLM has declined a whopping 57%.

In late November, Stellar was the fifth largest cryptocurrency by market cap with a total value of more than $3 billion. It has since fallen to ninth, where it was worth less than $1.9 billion.

Source: CoinMarketCap.com

As of Sunday, the top-ten ranking looked like this:

Strong Fundamentals, Poor Marketing

In terms of fundamentals, few cryptocurrency projects have the same pedigree as Stellar. The platform has quietly carved out a vast network for cross-border transactions spanning over 70 countries. The company has also partnered with IBM, SHIFT Markets, Deloitte around various blockchain-related initiatives.

Despite a solid track record, Stellar co-founder Jed McCaleb admits that his company hasn’t done the best job marketing its products and services. Outside of keen cryptocurrency observers, few in the mainstream understand what Stellar is trying to do. Stellar’s biggest marketing effort was announced last year when Blockchain.com, a leading wallet provider, unveiled a $125 million airdrop of XLM to existing wallets.

The commercial arm of the Stellar Development Corporation announced in September that it had purchased Chain, a high-profile blockchain startup. Together, they formed a new startup called Interstellar, which is paving the way for higher enterprise adoption of blockchain technology.  The acquisition was seen as a major milestone since Chain has already developed enterprise blochchain services for Visa, Citigroup and Nasdaq.

These fundamental drivers may not translate into higher prices for XLM in the near term, but they should provide assurance to long-term investors. Despite the recent wave of selling, the technical indicators suggest that XLM could get some reprieve in the short term.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

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