Stellar Lumens - A Hidden Opportunity
Stellar Lumens - A Hidden Opportunity
I cover the chart first and then some positive fundamental's and tokenomics.
The
XLM Chart
I located and plotted trigger points, boundaries and of course a time structure.
There is a clear bull/bear time pattern. Open the chart and see the months and see how they move in similar increments both by month and by number for Bull and Decline periods.
Three positive price action triggers are marked on the chart and are confirmed by the following:
1. Break above 10 Month SMA, combined with
2. Confirmed MACD Cross, combined with
3. Both occurring in the bull pattern time window
All three have just occurred as of July 2023. IN ADDITION
4. This time we have broken above the POC, and
5. We have broken out of the OBV resistance line.
All of the above is extremely bullish for Stellar Lumens XLM for the long term.
The risk/return is ideal as a price just under the bottom of the ascending triangle can act as a stop loss for you and the upper end can act as a first main point to take profit.
Undesirables:
- If we close a weekly candle outside of ascending Triangle, Exit trade.
- If we fall below the POC or 10MSMA, reduce position size or hold off until this happens and increase position size.
This chart is another fine example of how timeframes can help us structure a trade. Please note that this is a long term 12 - 18 month trade minimum. You could be exiting at any stage over those months depending on the trigger events mentioned above, ideally closing the majority of the position at the first trigger point 0.60c (lock in your stake and some profit). Furthermore, you have to be able to withstand the volatility within the ascending triangle without capitulating your position. There is currently some room to the downside but a lot more to the upside, you need to be prepared for both.
Positive XLM fundamentals:
Stellar is already being onboarded as a potentially compliant global payments system:
Stellar (XLM) like Ripple Labs (XRP) is intending to be a layer 2 international global payments remittances provider and enabler, albeit while Ripple Labs is targeting big business and institutional networks/transactions, Stellar has an incredibly varied pipeline from on/off ramps, asset tokenisation, moneygram conversion and access, and much more. Stellar appears to be targeting the developer, the retailer, the consumer, the international payments community in their transfers/remittances, and the unbanked. The Stellar Blockchain is a decentralized consensus protocol making it very quick and very efficient with a distributed ledger updating globally every 2 to 5 seconds.
ISO 20022 is an International Organization for Standardization (ISO) standard for exchanging electronic messages on payments data between financial institutions. They set the international payment standards through the likes of the SWIFT system and for the likes of CITI Bank, HSBC, J.P Morgan and Deutsch Bank.
Currently cryptocurrency’s that are ISO Compliant or in the process of becoming compliant include Ripple
XRP, Xinfin Network 
XCD, Algorand 
ALGO, IOTA and Stellar Lumens XLM.
Why is this so important? Well because ISO compliant payment networks will be the most likely to be called upon for the distribution or enablement of Central Bank Digital Currencies (CBDC’s) and other secondary payment protocols.
Private Partnership from the likes Ripple & Stellar will likely be called upon to develop, enable and distribute a new CBDC:
We are aware that most governments are in the process of developing CBDC’s and cannot complete this task without private partnerships.
For example as early as 2019 the Official Monetary and Financial Institutions Forum (OMFIF) outlined the following observations:
“Practically, the operation of a CBDC is likely to rely on some sort of public-private partnership. Central banks could outsource the distribution of the CBDC to private financial institutions, which could also be involved in the onboarding of users”
“most central bank respondents suggested they would outsource many of the public[1]facing tasks involved in CBDC management to third parties.”
“Some central banks noted that certain functions – such as ‘onboarding and overlay services’, or the actual distribution of the currency itself – could be ‘outsourced’ to private sector participants.”
“Among respondents, 64% said ‘intermediation’ functions, such as customer onboarding, which could be ‘outsourced’ to private sector participants, would be important in CBDC implementation”
In more recent news the Bank for International Settlements (BIS) AKA the Bank for Central Banks published a report based on surveys and data collection called “Making Headway”, they advised that:
o 86 central banks took part in the survey (including the largest)
o 15 CBDC’s would be up and operational by the end of the decade 👀
o Confirmed that Central Banks can hold up to 2% of their balance sheet in cryptocurrencies from the January 2025.
Considering the BIS is usually very anti crypto this news is significant.
Positive Tokenomics Vs competitor XRP:
XLM is currently 21st largest cryptocurrency in the world with a market cap of €3.4 billion.
XRP by comparison has a market cap of $27.8 billion and is ranked 5th, thus XRP would have a harder time of it in terms of multiplying its larger market cap and price.
In November 2019, the overall XLM supply was reduced. Now there are about 50 billion lumens, total, in existence, and no more lumens will be created.
So XLM has a max token supply of 50 billion whilst XRP has a max supply of 100 billion making it a more price dilutable token than XLM. At present XLM have released 51% of their 50 billion max token supply to the market whilst XRP have released 50% of their 100 billion tokens - 52.9 billion tokens (equating to number greater than the full supply available in XLM). XLM’s price will be greater impacted by demand than XRP due to the lower max token supply, smaller market cap and the fact no more new Lumens can be created, it is a fixed supply.
The more participants that join the network and use the network the less Stellar Lumens are available thus creating a demand. From Jan 2020 to present Stellar Lumen accounts have increased from about 4.2 million to 6.7 million. In the same period total transactions increased from <250,000 to almost 1 million.
All in this 12 – 18 month trade comes with a lot of positive upside and limited downside. XLM has a reasonable fundamental narrative backing it that could make it central to future payment networks and the XLM tokenomics provide a lot more upside potential than those of its close competitor Ripple (XRP). I am a fan of both offerings however it seems reasonable to have an XLM position if you have an XRP one. Maybe we can be the X-Army and support one another…. Maybe “X” will use both for its payment platform. One can dream. Please have a look at my XPR chart which is similar to the this XLM one, you may find that beneficial too.
Hope all of the above helps frame XLM in your minds eye and also provides you with a structure for an XLM trade.
PUKA
I cover the chart first and then some positive fundamental's and tokenomics.
The
XLM ChartI located and plotted trigger points, boundaries and of course a time structure.
There is a clear bull/bear time pattern. Open the chart and see the months and see how they move in similar increments both by month and by number for Bull and Decline periods.
Three positive price action triggers are marked on the chart and are confirmed by the following:
1. Break above 10 Month SMA, combined with
2. Confirmed MACD Cross, combined with
3. Both occurring in the bull pattern time window
All three have just occurred as of July 2023. IN ADDITION
4. This time we have broken above the POC, and
5. We have broken out of the OBV resistance line.
All of the above is extremely bullish for Stellar Lumens XLM for the long term.
The risk/return is ideal as a price just under the bottom of the ascending triangle can act as a stop loss for you and the upper end can act as a first main point to take profit.
Undesirables:
- If we close a weekly candle outside of ascending Triangle, Exit trade.
- If we fall below the POC or 10MSMA, reduce position size or hold off until this happens and increase position size.
This chart is another fine example of how timeframes can help us structure a trade. Please note that this is a long term 12 - 18 month trade minimum. You could be exiting at any stage over those months depending on the trigger events mentioned above, ideally closing the majority of the position at the first trigger point 0.60c (lock in your stake and some profit). Furthermore, you have to be able to withstand the volatility within the ascending triangle without capitulating your position. There is currently some room to the downside but a lot more to the upside, you need to be prepared for both.
Positive XLM fundamentals:
Stellar is already being onboarded as a potentially compliant global payments system:
Stellar (XLM) like Ripple Labs (XRP) is intending to be a layer 2 international global payments remittances provider and enabler, albeit while Ripple Labs is targeting big business and institutional networks/transactions, Stellar has an incredibly varied pipeline from on/off ramps, asset tokenisation, moneygram conversion and access, and much more. Stellar appears to be targeting the developer, the retailer, the consumer, the international payments community in their transfers/remittances, and the unbanked. The Stellar Blockchain is a decentralized consensus protocol making it very quick and very efficient with a distributed ledger updating globally every 2 to 5 seconds.
ISO 20022 is an International Organization for Standardization (ISO) standard for exchanging electronic messages on payments data between financial institutions. They set the international payment standards through the likes of the SWIFT system and for the likes of CITI Bank, HSBC, J.P Morgan and Deutsch Bank.
Currently cryptocurrency’s that are ISO Compliant or in the process of becoming compliant include Ripple
XRP, Xinfin Network XCD, Algorand ALGO, IOTA and Stellar Lumens XLM.Why is this so important? Well because ISO compliant payment networks will be the most likely to be called upon for the distribution or enablement of Central Bank Digital Currencies (CBDC’s) and other secondary payment protocols.
Private Partnership from the likes Ripple & Stellar will likely be called upon to develop, enable and distribute a new CBDC:
We are aware that most governments are in the process of developing CBDC’s and cannot complete this task without private partnerships.
For example as early as 2019 the Official Monetary and Financial Institutions Forum (OMFIF) outlined the following observations:
“Practically, the operation of a CBDC is likely to rely on some sort of public-private partnership. Central banks could outsource the distribution of the CBDC to private financial institutions, which could also be involved in the onboarding of users”
“most central bank respondents suggested they would outsource many of the public[1]facing tasks involved in CBDC management to third parties.”
“Some central banks noted that certain functions – such as ‘onboarding and overlay services’, or the actual distribution of the currency itself – could be ‘outsourced’ to private sector participants.”
“Among respondents, 64% said ‘intermediation’ functions, such as customer onboarding, which could be ‘outsourced’ to private sector participants, would be important in CBDC implementation”
In more recent news the Bank for International Settlements (BIS) AKA the Bank for Central Banks published a report based on surveys and data collection called “Making Headway”, they advised that:
o 86 central banks took part in the survey (including the largest)
o 15 CBDC’s would be up and operational by the end of the decade 👀
o Confirmed that Central Banks can hold up to 2% of their balance sheet in cryptocurrencies from the January 2025.
Considering the BIS is usually very anti crypto this news is significant.
Positive Tokenomics Vs competitor XRP:
XLM is currently 21st largest cryptocurrency in the world with a market cap of €3.4 billion.
XRP by comparison has a market cap of $27.8 billion and is ranked 5th, thus XRP would have a harder time of it in terms of multiplying its larger market cap and price.
In November 2019, the overall XLM supply was reduced. Now there are about 50 billion lumens, total, in existence, and no more lumens will be created.
So XLM has a max token supply of 50 billion whilst XRP has a max supply of 100 billion making it a more price dilutable token than XLM. At present XLM have released 51% of their 50 billion max token supply to the market whilst XRP have released 50% of their 100 billion tokens - 52.9 billion tokens (equating to number greater than the full supply available in XLM). XLM’s price will be greater impacted by demand than XRP due to the lower max token supply, smaller market cap and the fact no more new Lumens can be created, it is a fixed supply.
The more participants that join the network and use the network the less Stellar Lumens are available thus creating a demand. From Jan 2020 to present Stellar Lumen accounts have increased from about 4.2 million to 6.7 million. In the same period total transactions increased from <250,000 to almost 1 million.
All in this 12 – 18 month trade comes with a lot of positive upside and limited downside. XLM has a reasonable fundamental narrative backing it that could make it central to future payment networks and the XLM tokenomics provide a lot more upside potential than those of its close competitor Ripple (XRP). I am a fan of both offerings however it seems reasonable to have an XLM position if you have an XRP one. Maybe we can be the X-Army and support one another…. Maybe “X” will use both for its payment platform. One can dream. Please have a look at my XPR chart which is similar to the this XLM one, you may find that beneficial too.
Hope all of the above helps frame XLM in your minds eye and also provides you with a structure for an XLM trade.
PUKA
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