Stellar Price Analysis: XLM/USD Jumps 10% as IBM Launches Stellar-Powered World Wire Platform

  • XLM/USD late on Monday was holding double-digit gains, as the price broke down a significant barrier of resistance.
  • Information technology giant IBM has launched the World Wire service, which will leverage Stellar technology. 

XLM/USD: Recent Price Behavior

XLM/USD bulls are enjoying a decent rally to the upside, holding gains late in the session on Monday of some 10%. The price is now running at its third consecutive session in the green as part of a greater strong recovery seen over the last few weeks. XLM/USD has advanced for the past five straight weeks, having gained well over 50% within this period. The push north came after the price hit an all-time low around $0.073500, printed on 4th February.

Previously the price was moving within a descending wedge pattern formation, which had started to take shape and confine the price back in December 2018. The bulls managed to escape at the very start of March, inviting a strong wave of buying pressure. XLM/USD has pushed to its highest level seen since early January 2019.

IBM Launches World Wire Leveraging Stellar’s Network and XLM

On Monday, global technology giant IBM announced the launch of its payments network. The services will be blockchain-based and powered by the Stellar protocol. Known as IBM Blockchain World Wire. IBM’s solution will be a real-time global payments network, supporting cross-border transactions and foreign exchange in over 50 countries using digital assets via the use of stablecoins.

As part of this exciting news from the organization, IBM already signed six international banks to launch their own stablecoins on the network. Three of the banks have officially been identified; Philippines-based RCBC, Brazil’s Banco Bradesco and Bank Busan of South Korea. The others are still yet to be named.

Banks Using Lumens

IBM’s head of blockchain for financial services, Jesse Lund, said on the announcement:

“Aside from issuing their (banks) own tokens, the arrangement opens up the possibility of banks using lumens, the native token of the Stellar blockchain, which can be used as a “bridge currency” when it is hard to trade one type of fiat for another. Also, World Wire “could support other cryptos” but is only supporting lumens for the moment because financial institutions are put off by the volatility of cryptocurrencies.”

Technical Review – XLM/USD

XLM/USD daily chart.

The bulls have managed to recently break down a key near-term area of supply, $0.1100000-$0.1150000. XLM/USD has not traded firmly above this region since 10th January, demonstrating the significance of this push north. Further to the upside, the next major area of interest would be $0.1300000-$0.1400000. The price peaked up here at the back-end of 2018, following the December bull run.

In terms of support, the recently broken down supply area as detailed above. There may be potential room for a pullback, given how aggressive this surge higher has been. Bulls may look to rest here allowing a technical consolidation ahead of a further advance. A failure of this holding could be very punishing, as there is little in the way of significant support. The risk of a 100% reversal could be high, given the lack of comfort further south.

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.

 

Author:
Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.