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Stellar's logo. / Photo via Stellar Development Foundation

Stellar (XLM) is capturing market attention after surging over 77 percent in a single week, propelled by mounting anticipation surrounding its cooperation with the Depository Trust & Clearing Corporation (DTCC). Analysts suggest that the rally accelerated as expectations of the network benefiting from the traditional financial sector's tokenization initiatives combined with a massive short squeeze.

According to the U.S. cryptocurrency exchange Coinbase on June 1, Stellar is trading at $0.2695 as of 11:25 a.m., up 11.86 percent from the previous day. This price reflects a staggering 83.84 percent skyrocketing compared to a week ago and a 69.84 percent surge from a month prior.

The direct catalyst for this rally is the DTCC's announcement regarding plans to integrate the Stellar network with its tokenized securities platform. On May 28 (local time), the DTCC unveiled a blueprint to construct a tokenized securities infrastructure built on the Stellar network. The core of this project involves converting traditional financial assets—such as U.S. equities, exchange-traded funds (ETFs), and government bonds—into blockchain-based tokens to streamline their issuance, trading, and settlement processes. The initiative aims for a commercial service launch in the first half of 2027.

Industry experts evaluated this announcement as far more significant than a conventional partnership. Given that it represents a rare instance where the DTCC is adopting a public blockchain at the institutional financial infrastructure level, some view this as having laid the groundwork for Stellar's long-term breakthrough. Analysts also note that the passage of the CLARITY Act by the U.S. Senate Banking Committee reduced regulatory uncertainties, fortifying Stellar's positioning as a compliant digital asset and providing additional support for the current bullish momentum.

A short squeeze further amplified the upward price movement. According to data from Coinglass, approximately $1.1 million worth of short positions were forcefully liquidated during this spike, triggering cascading buy orders that expanded the gains. Currently, the total volume of tokenized assets within the Stellar network has expanded to roughly $1.82 billion, and the XLM price is exhibiting a technically bullish structure, hovering well above its 20-day, 50-day, and 200-day moving averages (MAs).

Nevertheless, concerns regarding overvaluation following the rapid short-term surge are emerging. The cryptocurrency market has historically seen patterns where Stellar spiked short-term on major announcements, only to face substantial subsequent corrections. In fact, technical indicators like the Relative Strength Index (RSI) are flashing overbought signals, raising the probability of profit-taking sell-offs in the near term.

Markus Thielen, founder of cryptocurrency research firm 10x Research, analyzed in a recent report, "The digital asset market can experience short-term rallies that far exceed expectations when powerful catalysts emerge, but volatility is also highly likely to expand once assets enter overbought territory."

Industry insiders project that whether this upward trajectory can be sustained hinges on the actual progress of the tokenization business and expanded institutional participation. Aurelie Barthere, principal research analyst at cryptocurrency data analytics firm Nansen, commented, "The tokenization of real-world assets (RWAs) is one of the fastest-growing sectors within the blockchain industry," adding, "If institutional adoption accelerates in earnest, market interest toward networks providing the underlying infrastructure will likely continue to intensify."

However, she cautioned, "Because short-term price movements can heavily price in anticipation ahead of time, it remains crucial to verify whether tangible business milestones follow suit."

                                                                                                                Kim Min-ju