Stellar’s digital currency, XLM, is grabbing attention with its remarkable surge. Its performance in recent weeks has transformed it from being undervalued to standing out as one of the top-performing cryptocurrencies of the year.
XLM exhibited an impressive uptrend of 61% from its lowest point to its peak on November 23rd, contributing to a weekly surge of 235%.
The cryptocurrency has surged by 600% from its lowest to highest point this month, establishing itself as one of the leading top-tier digital assets.
While the surge of XLM seems to be defying expectations, its exponential growth is also notable for a significant reason. Starting the month close to its all-time low, XLM has now inched closer to its peak in 2021.
Record Highs in XLM Derivatives Market
Setting new records, XLM reached an all-time high in one crucial aspect that fueled the recent surge in demand. XLM’s open interest on exchanges reached an impressive $443.99 million in the past 24 hours, marking the highest level ever.
For comparison, the previous peak for open interest was $180 million in April 2021. Additionally, according to Coinglass, XLM’s derivatives trading volume hit a high of $10.17 billion in the last 24 hours.
The considerable spike in open interest together with strong spot demand provided the perfect conditions for the explosive rally. Beyond this, other factors may have contributed to the sudden change in market sentiment.
Stellar Lumens to Facilitate the Federal Reserve’s FedNow System
Recent reports have revealed that Stellar Lumens, the native blockchain of XLM, will play a crucial role in supporting the FedNow initiative. This development hints at a potential surge in utility for the network, which could lead to increased demand for the token.
This specific news could be a key driver behind the surge in demand and the rise in prices observed towards the end of the week. It also underscores the prospect of heightened demand in the upcoming weeks as such updates might prompt more investors to hold onto XLM in anticipation of further price increases.
Nonetheless, a short-term retracement might be in the cards due to the extreme overbought conditions of the cryptocurrency at the time of writing.
Despite this, given XLM’s recent performance, there is a possibility for the upward price trend to continue into a phase of price discovery in 2025 or potentially even sooner.