Analysis of Stellar’s XLM Price Rise
Stellar’s XLM price has experienced a significant surge, rising by 10% to reach an intraday high of $0.4713, which is 32% higher than its lowest level this month. This rally is largely attributed to the ongoing XRP price surge, following the unveiling of the RLUSD stablecoin by Ripple Labs. The XRP price rise is expected to challenge Tether’s dominance, and as a result, XLM has mirrored this movement, given their common focus on money transfer and institutional relationships.
Historically, XLM and XRP have moved in sync, with Stellar often rallying when Ripple is rising. For instance, in July 2023, XLM rallied to a yearly high of $0.1963 when Ripple Labs won a major lawsuit against the Securities and Exchange Commission (SEC). Similarly, XLM price jumped by almost 500% in November after Donald Trump’s election victory, which raised hopes that the SEC may abandon its appeal against Ripple Labs.
The strong fundamentals of Stellar also contribute to its price rise. The number of addresses in the network has increased to over 9 million, and the volume handled in its network has soared to $4.9 billion. Additionally, Bitcoin’s continued rally, moving above the crucial resistance at $107,000 for the first time ever, has also positively impacted XLM’s price.
Technical Analysis of Stellar’s Price Chart
The daily chart shows that the XLM price bottomed at $0.3535 earlier this month, forming a hammer pattern, a popular reversal sign characterized by a long shadow and a small body. Stellar has remained above the 50-day and 100-day moving averages, forming a bullish engulfing chart pattern, which is characterized by a big bullish candle that covers a previous red candle.
Given these technical indicators, it is likely that Stellar will continue rising, with bulls targeting the intermediate resistance point at $0.50, which is about 12% above the current level. However, there is a risk that the coin may have formed a bearish flag pattern, which may lead to more downside, potentially retesting the support at $0.3535.
Predictions and Insights
Based on the analysis, here are some key predictions and insights:
- Short-term gain: Stellar’s XLM price is likely to continue rising in the short term, driven by the positive momentum of XRP and the overall cryptocurrency market.
- Resistance at $0.50: The intermediate resistance point at $0.50 is a key level to watch, as a break above this level could lead to further gains.
- Bearish flag pattern: The potential formation of a bearish flag pattern is a risk factor that could lead to a reversal of the current uptrend.
- Fundamental strength: Stellar’s strong fundamentals, including the increase in addresses and volume handled, provide a solid foundation for its price rise.
- Correlation with XRP: The correlation between XLM and XRP is expected to continue, with XLM mirroring the movements of XRP.
Overall, while Stellar’s XLM price rise may be brief, the underlying fundamentals and technical indicators suggest that the coin has the potential for further gains, driven by the positive momentum of the cryptocurrency market and its correlation with XRP.
