Stellar (XLM) has recently made headlines with a massive price surge of over 50%. This sudden and impressive rally has left investors and market observers wondering: Is this just temporary hype, or is it a sign of a more sustained upward trend for Stellar and the altcoin market? The trigger for this price pump was Ripple’s recent victory against the SEC, where it was declared that XRP, Ripple’s native cryptocurrency, is not a security. This landmark decision has had a bullish effect across the altcoin market, with Stellar leading the charge.
Stellar (XLM) Mirrors XRP’s Trend
To understand why Stellar has been so positively affected by Ripple’s victory, it’s crucial to understand the relationship between the two. Stellar was founded by Jed McCaleb, a co-founder of Ripple.
The decision has not only vindicated Ripple but also indirectly validated Stellar’s operational model. The ruling has eased concerns about potential regulatory actions against similar platforms, leading to increased investor confidence and a surge in Stellar’s price.
The effect of the SEC’s defeat is that it opens the door for more entities in the financial services sector to embrace Stellar’s technology for payment facilitation. MoneyGram, the international payment service provider, is currently the most notable company utilizing Stellar. Other companies such as Circle, Coinme, Abra, Anchorage, and Binance are also on the list.
Stellar is concurrently striving to establish a completely decentralized ecosystem through its Soroban project. Soroban, a Rust-based smart contracts platform, is engineered for scalability. Developers can leverage this network to create dApps with practical, real-world uses. However, the hurdle lies in the fact that the ecosystem has not yet achieved significant momentum among developers.
What’s Next For XLM Price?
From a technical perspective, XLM has the potential to challenge the significant $0.2 mark in the upcoming days, although its capacity to sustain a rally beyond this point appears limited at present. As of writing, XLM price trades at $0.14, surging over 30% in the last 24 hours.
XLM’s price witnessed a minor selling pressure near the high of $0.1977 and declined slightly, hinting that bulls are locking their profits at higher levels.
Furthermore, the weekly relative strength index (RSI) for XLM has entered the overbought territory, increasing the likelihood of a further downward correction.
In the event of a pullback, the XLM price could risk a fall toward an immediate downward channel around $0.1, representing a decline of approximately 50% from its current price level.
Other potential price points include the token’s 20-week exponential moving average of around $0.097, which may emerge if XLM faces a heavy selloff. However, this case is a distant dream for now.
An upward surge may intensify if the XLM price overcomes its crucial $0.2 level. Above this level, the price will likely attain its year-high at $0.25.
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