- Stellar Lumens token jumped for two straight days this week.
- Open interest in exchanges like Binance and Bybit has surged to October highs.
Stellar Lumens price staged a strong comeback on Tuesday and Wednesday as demand for the XLM token rebounded. The token jumped to a high of $0.1441, which was higher than this week’s low of $0.1250.
XLM open interest surges
Stellar Lumens price jumped sharply last week after Ripple Labs prevailed against the Securities and Exchange Commission (SEC). Investors were focusing on the currency heavily because of the close similarity between Ripple and Stellar.
Ripple and Stellar have the same mission of simplifying the financial services industry by making it simple for people to send money around the world. Ripple uses the On-Demand Liquidity (ODL) product and partners with financial institutions.
Stellar, on the other hand, focuses on USD Coin (USD), the second-biggest stablecoin in the world. It has partnered with companies like Moneygram and Coinme.
Another similarity is that Stellar’s founder was also a co-founder of Ripple. Therefore, investors believe that XLM is not a financial security because of its similarity with XRP.
XLM price is rising as its open interest surges. Data compiled by CoinGlass shows that the open interest surged to over $72 million, the highest level since October last year. $43 million of this open interest is in Binance. It is then followed in exchanges like Bybit, OKX, and Bitget.
As I wrote in this article on Litecoin, open interest is a sign that there is elevated demand of a cryptocurrency in the market. Most notably, Stellar’s open interest has jumped at a time when Ripple’s has jumped to over $1.1 billion.
Stellar Lumens price forecast
The daily chart shows that the XLM crypto price jumped sharply after the outcome of the Ripple lawsuit. It then pulled back sharply as investors took profits. Despite the decline, the coin remains above all moving averages. It also failed to move below the key support level at $0.1250 several times this week.
Therefore, I think that buyers will come back as they attempt to retest last week’s highest point. If this happens, the coin will need to rise by at least 40%. However, a drop below the support at $0.1250 will invalidate the bullish view.
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