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The unexpected price decline of Stellar ($XLM) in October boosted demand, even though the token has not yet recovered its previous losses. On-chain data and the project’s latest updates reflect confidence among certain investors, while overall market sentiment remains pessimistic.
Investor accumulation of $XLM throughout October indicates long-term conviction rather than short-term price chasing. The following factors provide a clearer explanation.
Exchange Reserves Plunge While TVL Hits Record High
According to DeFiLlama, the total value locked (TVL) on the Stellar chain, measured in $XLM, has surged to an all-time high of over 456 million $XLM locked across various DeFi protocols.
Comparing $XLM’s price performance with its TVL since last December highlights investors’ faith in the network’s ecosystem.
Specifically, since December, $XLM’s price has dropped by 50%, but the amount of $XLM locked in DeFi protocols has increased more than fourfold.
Another positive sign comes from Binance wallet data. The exchange’s official $XLM address (GBA…GPA) recorded over 240 million $XLM withdrawn from the exchange over the past two months, the largest outflow since 2024.
$XLM supply on Binance. Source: Stellar.expert">
Combining these two data points suggests that many $XLM investors were heavily accumulating during October. They may have moved tokens off exchanges for long-term storage or to deploy them in DeFi.
However, the overall picture is not entirely optimistic. Data from CoinGlass shows that the funding rate for $XLM futures contracts has remained negative for the past two weeks, reflecting ongoing bearish sentiment among traders.
$XLM) Funding Rate. Source: CoinGlass">
The OI-weighted funding rate has fluctuated below zero since October 11, indicating that traders are paying to maintain short positions. The drop below $0.20 has made market sentiment even more pessimistic.
While the TVL and exchange reserve data suggest long-term optimism, the negative funding rate reveals short-term selling pressure on exchanges. As a result, $XLM’s price could continue to fall. Yet, for some investors, that weakness presents an opportunity.
Several investors believe that $XLM below $0.20 represents an attractive entry point before a potential bull run similar to 2017.
$XLM Price Prediction. Source: X Finance Bull">
“What’s coming next? The mass adoption rally — it’s written all over this chart. Two clean accumulation phases. Buy zone holding. The breakout won’t warn you,” investor X Finance Bull predicted.
Finally, Stellar’s vitality stems from its core upgrades and real-world use cases.
Validators on the Stellar network recently voted to upgrade the Stellar Mainnet to Protocol 24, fixing a bug in the state storage feature. At the same time, the value of real-world assets (RWA) on Stellar rose by 26.3% over the past month, reaching $638 million.
The post How Investors Stockpiled Stellar ($XLM) Despite Falling Prices in October appeared first on BeInCrypto.