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Despite a sharp decline in Stellar (XLM) prices in October, investor interest in the token remained robust, highlighting confidence in the network’s long-term potential. XLM has seen its price drop by roughly 50% since December, yet total value locked (TVL) in Stellar-based DeFi protocols surged to 456 million XLM, signaling a strong belief in the ecosystem among certain investors.
Investor Accumulation Surges Amid Price Declines
October’s market conditions have been challenging for XLM, with bearish sentiment prevailing and futures funding rates turning negative. However, on-chain data suggests that investors were actively accumulating XLM rather than selling in panic. Over the past two months, more than 240 million XLM were withdrawn from Binance, marking the largest outflow since 2024. This movement indicates that investors were taking tokens off exchanges for long-term storage or deploying them in DeFi platforms, rather than simply trading.
These patterns suggest a growing conviction that XLM prices under $0.20 represent an attractive entry point, offering the potential for substantial gains during future market recoveries. Several market analysts have highlighted that periods of accumulation during price dips often precede stronger rallies, as long-term investors gain control while short-term traders exit.
DeFi Activity Hits Record Highs
According to DeFiLlama, Stellar’s TVL has reached a new peak of 456 million XLM locked across various decentralized finance protocols. This level represents a more than fourfold increase since December, despite XLM’s price falling by half during the same period.
The disparity between XLM price performance and TVL growth indicates that investor confidence in the Stellar ecosystem has strengthened, even as broader market sentiment remains cautious. Higher TVL suggests that more tokens are being deployed for staking, lending, and liquidity provision, all of which reinforce the network’s fundamentals.
This active participation in DeFi also reflects a shift in investor focus: instead of chasing short-term price gains, participants are increasingly seeking long-term opportunities that leverage Stellar’s high-performance network and real-world applications.
Negative Funding Rates Show Short-Term Pressure
While long-term investor activity has been strong, short-term sentiment has been bearish. Data from CoinGlass shows that XLM futures funding rates have remained negative for the past two weeks. This indicates that traders are paying to maintain short positions, reflecting expectations of continued downward pressure on the token.
The combination of negative funding rates and XLM’s price below $0.20 suggests that short-term traders are pessimistic, even as longer-term holders continue accumulating. Market participants often view such conditions as a potential opportunity to buy undervalued assets at attractive prices before the next rally.
Stellar Network Upgrades and Real-World Adoption
Stellar’s ecosystem is not just supported by investor accumulation; network upgrades and real-world adoption are also key drivers. Validators recently voted to upgrade the Stellar Mainnet to Protocol 24, addressing a bug in the state storage feature. Such technical improvements strengthen network reliability and demonstrate ongoing commitment to innovation.
Meanwhile, the value of real-world assets (RWA) on Stellar rose by 26.3% over the past month, reaching $638 million. This growth in tokenized assets highlights Stellar’s expanding use cases in areas such as cross-border payments and financial infrastructure. As these applications continue to grow, investor confidence in XLM is likely to strengthen further.
Market Outlook for XLM
Despite bearish short-term conditions, the combination of record-high TVL, large exchange outflows, and network upgrades points to a positive long-term outlook for Stellar. Many investors view the current price weakness as an opportunity to accumulate tokens ahead of a potential bull run similar to previous cycles, such as in 2017.
Technical indicators suggest that XLM’s price may consolidate near current levels, with accumulation phases forming the foundation for a future rally. The ongoing divergence between short-term sentiment and long-term activity indicates that a strategic accumulation by patient investors could set the stage for significant upward momentum when market conditions stabilize.
Conclusion
Stellar’s performance in October demonstrates a critical dynamic in cryptocurrency markets: price declines do not necessarily reflect diminished investor confidence. While XLM has lost half its value since December, long-term accumulation, rising TVL, and real-world adoption suggest strong conviction among holders.
The significant withdrawals from Binance and record TVL levels indicate that investors are preparing for future opportunities rather than reacting to short-term market fluctuations. Combined with ongoing network upgrades and growth in tokenized assets, Stellar appears well-positioned for potential recovery once bearish sentiment eases.
For long-term investors, the October price weakness may have offered an ideal accumulation window. While XLM’s short-term performance remains under pressure, the fundamentals of the Stellar ecosystem continue to support its long-term potential, making it a token to watch in the months ahead.
