How Stellar (XLM) Could Benefit from XRP’s Expected Price Surge?

XLM Price Analysis

Stellar (XLM) price spiked more than 8% on July 31, buoyed by promises of favorable cryptocurrency regulation by Donald Trump in the US Election campaigns. Can XLM mirror XRP’s ongoing rally?

XRP Price Rally Draws Investor Attention to XLM

XLM is the native token of Stellar, a blockchain network that shares close links with Ripple (XRP). The links between XRP and XLM run back to 2012, when Ripple Co-Founder, Jed McCaleb, departed to create Stellar and pursue a different token utility.

This shared lineage has led to intertwined market dynamics and correlated price movements over the years. The close correlation between XRP and XLM has been brought to fore again over the past week.

As depicted above, historical price data shows that XRP and XLM’s explosive movements have been closely correlated since inception of both assets.

On July 27, leading US Presidential Candidate, Donald Trump, delivered a bullish speech at the Bitcoin Nashville 2024 conference, promising support and a friendly regulatory landscape for cryptocurrencies.

Unsurprisingly, XRP, which has been hampered over the last 4-years by Ripple’s long-running legal battle against the current US SEC regime, has received renewed interest from investors.

On July 31, XLM recorded a remarkable 8% price surge, moving from $0.09 to $0.105 at the time of publication. Meanwhile XRP’s daily chart (depicted by the orange trend line) shows a starkly similar price movement with an 8.12% uptick recorded within the same time frame as XLM’s rally.

In theory, both XRP and XLM are focused on facilitating cross-border payments, but they have taken slightly different paths in terms of tech stacks, partnerships and technological implementations.

However, the perception that a Donald Trump victory could lead to a friendlier regulatory landscape has lifted market demand for both XRP and XLM in the last few days.

More so, XRP’s recent legal victories against the SEC have been a significant boost for the market. As XRP demonstrated resilience and a potential pathway for regulatory clarity, other cryptocurrencies like XLM have benefited from the improved sentiment.

Investors now perceive a reduction in regulatory risk, which has positively influenced market dynamics and contributed to the bullish price action observed in both the XRP/USD and XLM/USD markets this week.

Hence, based on the historical trends, and closely-related market dynamics, XLM is likely to maintain its upward trajectory if the XRP rally advances above the critical $0.65 resistance.

XLM Price Forecast: $0.15 Rally in Motion

Stellar (XLM) has experienced a notable price surge, gaining 8.12% to reach $0.104950 on Friday. Partly-driven by positive market sentiment in the XRP market, technical indicators suggest further upside potential.

Firstly, the Donchian Channels, a volatility-based indicator, show the upper band at $0.112446, which represents the immediate resistance level. This resistance is critical for bulls to overcome in order to sustain the upward momentum.

A successful breach above this level could pave the way for XLM to target higher levels around $0.15.

On the downside, the middle band of the Donchian Channels at $0.100319 provides the first line of support, crucial for maintaining the bullish outlook. A drop below this level could indicate weakening bullish momentum and a potential retest of the lower band at $0.088191.

Furthermore, the Balance of Power (BOP) indicator stands at 0.20, reflecting a bullish bias. This positive BOP reading suggests that buyers currently have control over the market, reinforcing the bullish outlook.