Contagion from FTX Pushes XLM Price to 2-year Low

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Stellar (XLM) holders witnessed massive losses as cryptocurrency markets continued to deleverage. 

The global crypto market cap and prices of most cryptocurrencies tanked as FTX’s demise led to a larger market crash. SLM, the 25th ranked crypto by market cap, saw a similar fate to most of its counterparts losing over 25% in just two days. 

XLM Price: A Grim Affair

XLM price was down 90% from its all-time high price $0.94 made in 2018. The coin has dropped by almost 38% in the last month, plunging to a two-year low of $0.078. 

While XLM price was still up 230.70% from its cycle low price of $0.03 made in March 2020, this is hardly a cause for celebration. Stellar’s trade volumes reached over $300 million on Nov. 10, largely indicative of sell-offs alongside heavy price losses. 

Trade volumes XLM | Source: Santiment

Despite the losses, weighted sentiment for Stellar turned positive, although social volumes fell as dramatically as the XLM price. 

Stellar (XLM) Social sentiment | Source: Santiment
Social sentiment | Source: Santiment

On a four-hour chart, however, XLM price appreciated by 4% even though short-term RSI still oscillated in the oversold zone. Looking at the massive losses, it could be argued that XLM climb upward to regain price momentum could prove a challenge. 

Network Value Depreciates 

With XLM price hitting levels unseen in over two-years, its adjusted NVT took a hit. NVT is the ratio of the network value (or market capitalization, current supply) divided by the adjusted transfer value. 

Stellar (XLM) Adjusted NVT | Source: Messari 
Adjusted NVT | Source: Messari 

NVT stands for Network Value to Transactions Ratio and a low NVT presents largely bearish sentiment as investors place the asset at a discount. Furthermore, Stellar’s transaction volumes noted a major spike presenting mostly sell-offs in the market. 

Stellar (XLM) Adjusted Transaction Volume | Source: Messari 
XLM Adjusted Transaction Volume | Source: Messari 

XLM adjusted transaction volume reached an eight-month high of $143 million. As seen in Jan. 2022 and Dec. 2021, spikes in adjusted transaction volume during bearish time periods has often led to more losses. 

Thus, seemingly, Stellar on-chain health seemed rather weak to support aggressive price appreciation. However, a fall below the support area around the $0.06-$0.07 mark seems unlikely. 

In the near term, if bulls can reenter the market and take control of the price action XLM could make a comeback above the $0.10 mark. 

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