Stellar (XLM) surged more than 40% in a single day after DTCC unveiled a tokenization deal, triggering a short squeeze while skeptical traders held their positions.
Key Points:
- XLM jumped more than 40% in 24 hours after DTCC selected Stellar to tokenize custodied assets.
- Short sellers absorbed about $12.4 million in liquidations, yet most top traders stayed positioned for a drop.
- The integration targets the first half of 2027, leaving the rally dependent on momentum for now.
Stellar Rallies on DTCC Deal
The Depository Trust & Clearing Corporation announced plans to tokenize DTC-custodied assets on the Stellar network, with a launch targeted for the first half of 2027.
The clearing house settles trillions of dollars in securities each day, and its decision lent rare institutional weight to a payments-focused blockchain.
Under the plan, banks could move traditional securities such as stocks, bonds and Treasuries onto Stellar's ledger. A DTCC managing director, Brian Steele, described the aim as a drive to "galvanize the industry" toward tokenization at scale. DTCC has framed the work as part of a broader multi-chain strategy.
XLM climbed more than 40% on the day, topping $0.28 at its peak before easing back, and the advance lifted market capitalization above $8 billion.
Trading volume pushed past $2 billion as buyers crowded back into the token, ranking the move among Stellar's sharpest in years.
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XLM Short Sellers Face Squeeze Risk
Traders positioned for a drop unwound their bets fast. Short sellers absorbed about $12.4 million in forced liquidations after May 28, far more than longs surrendered over the same stretch. Each forced exit fed additional buying pressure.
Even after the run higher, most short-term traders still leaned short, a crowded stance that could force more covering should prices hold.
Funding rates had drifted negative before the surge, a sign many expected further losses rather than a breakout.
The deal still reshaped Stellar's case by planting the network inside real-world asset tokenization, a sector that already draws firms such as Franklin Templeton and WisdomTree. Holdings tied to that effort have swelled toward $1.82 billion, though analysts cautioned that the integration sits nearly two years away.
XLM Reverses Months of Decline
The move ended a long stretch of weakness. XLM had drifted inside a falling channel since late 2025, sliding toward support near $0.14 before this week's turn. Each earlier attempt to break higher had stalled, leaving sellers in control for months. Sentiment stayed cautious throughout that slide, which helps explain why the reversal caught so many traders offside.
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