Stellar (XLM) has seen a significant increase in volume, reaching its highest levels since May 2021. This increase coincides with Ripple’s (XRP) unexpected surge to $1 on Saturday, November 16.
XLM’s price has also surged 30% in the past 24 hours, mirroring XRP’s performance. But why is this happening? This analysis reveals everything behind this closely linked movement.
Stellar's landmark history with Ripple remains in effect
According to data from Santiment, XLM’s trading volume has surged to $2.96 billion at press time. The surge in volume clearly indicates growing buying pressure on the altcoin and a notable increase in market interest.
The last time XLM experienced such high volume levels was during the 2021 bull market, a period in which crypto assets saw market-wide rallies.
This spike in volume suggests that investors are becoming more confident in XLM’s potential, especially given XRP’s recent surge. Historically, both altcoins share a strong correlation, mainly due to two reasons.
Stellar volume. Source: Santiment
First, former Ripple co-founder Jed McCaleb has gone on to co-found Stellar. The two projects share a strong connection, especially in their focus on blockchain-based cross-border payments, thus aligning Stellar’s fundamentals with Ripple’s.
As a result, the prices of XRP and XLM often move together. Data from Macroaxis supports this, showing a 90-day correlation coefficient of 0.96. To put this into perspective, the coefficient ranges from -1 to +1. Values closer to -1 suggest a weak correlation, while those closer to +1 indicate a strong link between the assets.
Price Correlation between Stellar and Ripple. Source: Macroaxis
In addition to XLM volume, the altcoin’s Open Interest (OI) is another metric experiencing a notable increase. A high OI indicates that capital is flowing into the market, with new positions being established, reflecting a strong bullish sentiment.
On the other hand, a low OI suggests otherwise. According to Santiment, XLM’s OI has risen to $75.05 million — the highest level since Ripple’s partial victory over the US in July 2023. If the value continues to increase, then XLM’s price could also rise above $0.20.
Stellar Open Interest. Source: Santiment
XLM Price Prediction: Possible Move to $0.24
On the daily chart, the XLM price initially rose to $0.22 but faced rejection at that point. Despite the slight pullback, the altcoin’s value remains above the Ichimoku Cloud. This is a technical indicator that measures support and resistance and identifies the trend direction.
When the cloud is above the price, the trend is down, indicating a high level of resistance. But in the case of XLM, the cloud is below the value, suggesting strong support that could push the price higher.
Stellar Daily Analysis. Source: TradingView
If this continues and XLM’s volume continues to increase, then the altcoin could reach $0.24. However, if holders decide to take profits, this may not happen. Instead, the price of XLM could drop to $0.16.
The article Stellar (XLM) follows XRP and shoots up 30%; understand was first seen on BeInCrypto Brasil.
