Stellar Lumens was one of the best-performing cryptocurrencies on Dec. 17 as it continued to mirror Ripple.
Stellar (XLM) price rose by 10%, reaching an intraday high of $0.4713, up 32% from its lowest level this month.
This rally coincided with the ongoing XRP price surge after the developers unveiled the RLUSD stablecoin. Ripple Labs expects its new stablecoin will soon see inflows and challenge Tether’s dominance.
XLM and Ripple (XRP) often move in sync because they are both focused on money transfer. Stellar’s goal is to promote peer-to-peer transfers of cash, while Ripple is mostly focused on institutions like banks and money transfer.
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Ripple and Stellar have a common origin as well. Jed McCaleb, Stellar’s founder, was one of the founding team of Ripple Labs.
Therefore, Stellar often rallies when Ripple is rising. For example, Stellar rallied to a yearly high of $0.1963 in July 2023 when Ripple Labs won a major lawsuit against the Securities and Exchange Commission.
Similarly, XLM price jumped by almost 500% in November after Donald Trump won the election. His victory meant that the SEC may abandon his appeal against Ripple Labs when Paul Atkins starts his tenure.
XLM also jumped as Bitcoin continued its strong rally, moving above the crucial resistance at $107,000 for the first time ever. Altcoins often when Bitcoin is doing well.
Stellar is also seeing strong fundamentals. For example, its most recent report showed that the number of addresses in the network rose to over 9 million. Also, the number of volume handled in its network soared to $4.9 billion.
Stellar price analysis
XLM price chart | Source: crypto.news
The daily chart shows that the XLM price bottomed at $0.3535 earlier this month. It then formed 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. It has also formed a bullish engulfing chart pattern, which is characterized by a big bullish candle that covers a previous red candle.
Therefore, Stellar will likely continue rising as bulls target the intermediate resistance point at $0.50, which is about 12% above the current level.
The risk, however, is that the coin may have formed a bearish flag pattern, which may lead to more downside. Such a move would see it retest the support at $0.3535.
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