- Stellar crypto price has remained in a consolidation phase in the past few days.
- BitStamp, a leading exchange added Circle’s USD Coin into its ecosystem.
- There are concerns about the rising bond yields in the US.
Stellar Lumens (XLM) price held steady on Wednesday as investors remained concerned about the rising bond yields. The XLM token was trading at $0.1135, where it has been at in the past few days. It remains 41% below the highest level in July.
Rising bond yields
The biggest catalyst for the Stellar price is related to the state of the American economy, where government spending has gotten out of hand. Public debt has soared by more than $400 billion in the past few weeks. It now stands at over $33.4 trillion and analysts believe it will hit $34 trillion in the next few months.
America’s debt is surging at a time when some of the biggest holders of US debt are cutting it. China now holds $822 billion of debt, the lowest level since 2009. Saudi Arabia and other smaller holders have also been dumping it.
At the same time, the total interest paid on US debt has jumped to more than $800 billion. Therefore, there is a real risk that the US will lose its only remaining triple-A from Moody’s. S&P downgraded thew US government in 2011 while Fitch slashed it in 2023.
Meanwhile, the Federal Reserve has committed to continuing hiking interest rates in the near term. In a statement, Loretta Mester said that she supported either another 0.25% rate increase or leaving them at an elevated level for an extended period.
Read more: How to buy Stellar Lumens.
All these events matter for Stellar Lumens price and other cryptocurrencies for two reasons. First, high-interest rates make risky assets unattractive to investors. Instead, these people prefer moving to safe assets like short-term bonds.
Second, they increase the risk of a recession in the United States. In most periods, Stellar and other risky assets react negatively to a recession.
Meanwhile, Stellar lumens reacted to news that BitStamp had added Circle’s USDC to its ecosystem. The biggest part of the USD Coin runs on Stellar’s network.
Stellar Lumens price forecast
The daily chart shows that the XLM price has been under intense pressure in the past few days. It has found substantial support at $0.1100, where it has failed to move below since August 17th. The coin has moved slightly below the 25-day and 50-day moving averages.
It is also above the ascending trendline that connects the lowest swings since December last year. The Relative Strength Index (RSI) moved below the neutral part of 50 while the Average Directional Movement Index (ADX) has fallen below 20.
Therefore, the outlook for the XLM price is neutral with a bearish bias. More downside will be confirmed if the Stellar Lumens price move below the key support at $0.1100. If this happens, the next key level to watch will be at $0.10.
