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Stellar's (XLM) Impressive Surge Following Ripple's Court Victory
The Stellar (XLM) token is currently basking in the spotlight following Ripple's legal win against the United States Securities and Exchange Commission (SEC). In the wake of the favorable verdict on July 13, the XLM price has notably skyrocketed.
XRP Propelling XLM Price To New Heights
Since a federal judge ruled that XRP sales on public platforms did not contravene American securities laws, XLM's price has surged forward by over 60%. Despite this phenomenal rise, the token is still roughly 20% below its local pinnacle of $0.195 and was trading at about $0.154 on July 23.
The surge in XLM's price has coincided with the token's increasingly positive correlation with XRP on a daily basis. As of July 23, the correlation factor between these two assets stood at 0.95, implying their could movement is nearly identical.
Given that Stellar is a standalone blockchain project for payments, co-founded by Jed McCaleb of Ripple, it's hardly surprising that XLM and XRP markets' price trends closely mirror each other. For instance, XRP's price has also escalated around 60% following Ripple's legal victory.
However, the future is unpredictable. It has been suggested that the XRP price might plunge by about 40% by September, a situation likely to place similar bearish pressures on XLM.
XLM Most Overbought Since April 2021
From a technical standpoint, the recent surge in XLM price has prompted the token’s weekly RSI to reach its most overbought levels since April 2021. The latest data, as of July 23, indicated that XLM's weekly RSI hovered around 72.5. Also worth noting is the token's proximity to a robust resistance confluence, comprised of its 200-week EMA (the blue wave) and a parallel line (purple) close to $0.164. These factors point towards the possible likelihood of a significant price correction for XLM in the upcoming weeks.
In a bearish scenario, by September, XLM could recede to the 50-week EMA (the red wave) roughly around $0.111, representing a 30% dip from present price benchmarks. This trajectory also aligns with XLM's support during the May-November 2019 phase.
On the contrary, a conclusive breakthrough above the resistance confluence might pave the way for an XLM/USD rally towards $0.22 by September, marking a 45% leap from current levels. Historical data indicates that this value served as a pivot of support and resistance from June 2021 to April 2022.
This article does not purport to provide investment advice or recommendations. Every trading or investment move entails risk, and readers are encouraged to conduct due diligence before making financial decisions.
