Home Altcoins News Stellar Network Activity Drops 50%, But Experts Say It’s Not a Cause for Concern

Stellar Network Activity Drops 50%, But Experts Say It’s Not a Cause for Concern

Stellar Network

Stellar (XLM) has faced a significant dip in network activity, with processed operations dropping by 50% from a previous peak of over 600 million transactions per period. Currently, the network is processing approximately 300 million operations. While this drastic decrease may appear alarming, analysts believe it may not be as dire as it seems, and a recovery could be on the horizon.

Stellar has experienced similar downturns in network activity in the past, often followed by periods of renewed growth and interest. Despite this short-term slump, both Stellar’s network and its native asset XLM are showing resilience, and the outlook for the future remains largely unchanged.

Understanding the Dip in Stellar’s Network Activity

The recent decline in network activity signals a slower pace of transactions, which has raised some questions about user engagement and adoption. The drop in processed operations is mirrored by a decrease in newly created assets on the Stellar network. This could indicate a lower demand for creating trustlines and issuing new tokens, activities that are core to Stellar’s decentralized financial ecosystem.

However, it’s important to remember that blockchain networks, especially those as mature as Stellar, often experience fluctuations in transaction volumes. Historically, such declines have been temporary and have been followed by periods of growth. While this dip in activity might be concerning in the short term, it’s not entirely out of the ordinary for networks to go through these cycles.

Price and Support Levels for XLM

In terms of price action, XLM is holding steady above its crucial $0.36 support level, corresponding with the 100 Exponential Moving Average (EMA). This suggests that there’s still some buying interest at this level. If the price breaks below the $0.36 level, however, it could see further downside, with potential support at $0.28, where the 200 EMA is situated.

On the positive side, a recovery above $0.42 could signal a return of bullish momentum. A move past $0.47 would further confirm the resumption of an uptrend, giving investors a more optimistic outlook for the price of XLM.

A Long-Term Perspective on Stellar’s Growth

Despite the recent decrease in activity, there are positive signs that Stellar’s ecosystem is still expanding. Over the long term, the number of trustlines and assets continues to grow, suggesting that there’s ongoing development and usage of the network. This growth, albeit slower in recent months, provides a foundation for a potential recovery.

It’s also important to note that the drop in network activity is not necessarily an indicator of a fundamental problem with the Stellar network itself. It could be a temporary adjustment, possibly due to external market conditions or a natural lull after periods of intense growth. The key is that Stellar’s infrastructure remains solid, and its use cases are still relevant in the blockchain and decentralized finance space.

What’s Next for Stellar (XLM)?

The current dip in network activity for Stellar may cause some short-term uncertainty, but the long-term outlook remains positive. As the network continues to evolve, it’s likely that activity will pick up again, potentially leading to price gains for XLM. Investors will be keeping an eye on key support levels, particularly the $0.36 mark, to gauge whether the current price stability can be maintained.

For now, Stellar’s network activity may be experiencing a temporary lull, but history has shown that such periods are often followed by rebounds. With strong technical levels in place and growing assets on the network, XLM may well be poised for a resurgence, as long as market conditions remain favorable.

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Sakamoto Nashi

Nashi Sakamoto, a dedicated crypto journalist from the Virgin Islands, brings expert analysis and insight into the ever-evolving world of cryptocurrencies and blockchain technology. Appreciate the work? Send a tip to: 0x4C6D67705aF449f0C0102D4C7C693ad4A64926e9

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