Stellar (XLM) is enjoying the recent success of Ripple’s partial victory against the U.S. Securities and Exchange Commission (SEC), with a surge of over 60% since the court ruling on July 13.
The crypto market has been abuzz with the latest news on the crypto SEC ruling, and the crypto community is celebrating the victory of Ripple.
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The recent success of Ripple has been a boon for other cryptocurrency companies like Stellar (XLM), which has seen a surge in its price since the court ruling. This is good news for Voyager Crypto, as it has been a leader in the crypto space.
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XRP fuels XLM price rally again
Since July 13, when a federal judge ruled that XRP sales on public exchanges did not violate U.S. securities laws, the price of XLM has surged by more than 60%. Despite this, the token is still around 20% lower than its local peak of $0.195, trading at approximately $0.154 on July 23.
The strong correlation between XRP and XLM has become increasingly apparent on the daily timeframe. As of July 23, the correlation coefficient between the two assets was 0.95, indicating that they are moving almost in sync.
This is not surprising as Stellar is a spin-off blockchain payment platform created by Ripple’s co-founder Jed McCaleb. For example, XRP’s price has also increased by about 60% since the Ripple victory.
However, XRP’s price could drop by around 40% by September, which is likely to have a similar bearish effect on XLM.
XLM most overbought since April 2021
Analyzing the technicals, the recent surge in XLM’s price has caused its weekly relative strength index (RSI) to reach its highest level since April 2021.
As of July 23, the weekly RSI of XLM was around 72.5. In addition, the token is trading near a strong resistance area composed of its 200-week exponential moving average (200-week EMA; the blue wave) and a horizontal line (purple) near $0.164.
The indicators suggest that XLM could experience a sharp price decline in the coming weeks.
In this bearish scenario, the price of XLM could drop to its 50-week EMA (the red wave) near $0.111 by September, a decrease of 30% from the current levels. This level also coincides with the support of XLM during the May-November 2022 session.
On the other hand, if the resistance area is decisively surpassed, the XLM/USD pair could rally to $0.22 by September, an increase of 45% from current levels. This area served as support and resistance in June 2021-April 2022.
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