Nov 17, 2024
6thTrade
tellar (XLM) has seen a remarkable 30% price increase within 24 hours, accompanied by a surge in trading volume to $2.96 billion. This marks the highest volume levels for XLM since May 2021. The rally coincides with Ripple's (XRP) unexpected climb to $1 on Saturday, November 16, highlighting the strong correlation between the two cryptocurrencies. $XLM
Historical Connection Between Stellar and Ripple
Data from Santiment reveals that XLM's volume spike reflects heightened investor confidence, mirroring a similar uptick during the 2021 bull market. The connection between XLM and XRP dates back to their shared origins, as Stellar was co-founded by Jed McCaleb, a former Ripple executive. Both projects focus on blockchain-based cross-border payments, fostering a strong correlation in price movements.
Recent analysis confirms this connection, with Macroaxis reporting a 90-day correlation coefficient of 0.96 between the two assets. This high level of correlation underscores their closely aligned market behavior.
Open Interest Hits Record High
XLM’s Open Interest (OI) has also reached $75.05 million, the highest level since Ripple’s partial legal victory in July 2023. A rise in OI typically signals increasing capital inflow and bullish sentiment. Should this trend persist, XLM’s price could rise further, potentially surpassing $0.20.
Technical Indicators and Price Outlook
On the daily chart, XLM’s price faced resistance at $0.22 but remains above the Ichimoku Cloud—a bullish indicator suggesting strong support for further upward movement. If the current momentum and volume persist, XLM’s price could target $0.24. However, profit-taking by investors might lead to a pullback, potentially lowering the price to $0.16.
Key Takeaway: Stellar’s current rally is heavily influenced by its strong correlation with XRP and bullish market sentiment. While technical indicators point to further growth, selling pressure could pose a risk to sustained price increases.