Stellar’s XLM price rises as XRP rebounds, but gains may be brief

Stellar Lumens continues to mirror Ripple, becoming one of the best-performing cryptocurrencies on December 17.

Stellar (XLM) price is up 10%, reaching an intraday high of $0.4713, up 32% from this month’s low.

This rally coincided with the ongoing XRP price increase after developers announced the RLUSD stablecoin. Ripple Labs expects its new stablecoin to see inflows soon and challenge Tether’s dominance.

XLM and Ripple (XRP) often move in sync because they are both focused on money transfer. While Stellar’s goal is to encourage peer-to-peer cash transfers, Ripple focuses mostly on institutions such as banks and money transfers.

Ripple and Stellar also have a common origin. Stellar founder Jed McCaleb was one of the founding team of Ripple Labs.

This is why Stellar often rallies when Ripple is rising. Stellar, for example, rose to a yearly high of $0.1963 in July 2023 after Ripple Labs won a major lawsuit against the Securities and Exchange Commission.

Similarly, the XLM price increased by almost 500% in November after Donald Trump won the election. His victory meant that the SEC could drop its objection to Ripple Labs when Paul Atkins took office.

As Bitcoin continued its strong rise, XLM also jumped and broke above the critical $107,000 resistance for the first time. Altcoins usually emerge when Bitcoin is doing well.

Stellar is also seeing strong fundamentals. For example, its latest report showed that the number of addresses on the network had increased to over 9 million. Additionally, the amount of volume processed on its network increased to $4.9 billion.

Star price analysis XLM price chart | Source: crypto.news

The daily chart shows that XLM price dropped to $0.3535 earlier this month. He later created the hammer pattern, a popular reverse sign characterized by a long shadow and a small body.

Stellar remained above the 50-day and 100-day moving averages. It also formed a bullish engulfing bull chart pattern, characterized by a large bullish candle covering a previous red candle.

Therefore, Stellar will likely continue to rise as the bulls target the intermediate resistance point at $0.50, which is around 12% above the current level.

However, the risk is that the coin may have formed a bearish flag pattern that could lead to further declines. Such a move would prompt a retest of support at $0.3535.