- Stellar (XLM) surged 30% in 24 hours as trading volume reached $2.96 billion.
- Stellar’s adoption by major firms and its growing role in global payments highlight its long-term potential.
Stellar (XLM) has seen a notable increase in trading volume, reaching its highest point since May 2021. This comes at the back of a recent surge in Ripple (XRP) prices to $1, thereby reviving interest in the two coins.
The price of XLM has surged by 30% in the last day, which is suggestive of a bullish sentiment owing to the connection with XRP. XRP and XLM have always had their prices tied closely together because both these currencies share a similar structure in their blockchains. Stellar, founded by Jed McCaleb, whose previous project was Ripple, also targets cross-border payments.
This link is evident by the 90-day correlation coefficient of 0.96, which shows the high price relationship between the assets. Ripple’s recent rally due to the new regulatory approval and high whale activity has also positively impacted the XLM tokens.
Stellar and Ripple Price Correlation.
Open Interest (OI), one of the most important indicators in the market, also aligns with this bullish notion. The OI of XLM has recently accelerated to $75.05 million, the highest since Ripple’s partial legal win in Jul 2023. Higher open interest is an indication of the influx of funds and improved investor confidence.
XLM’s Golden Cross
The current XLM rally is in line with a golden cross on the technical chart. This bullish indicator is formed when the 50-day moving average goes above the 200-day moving average. For XLM, this technical event occurred concurrent with a bullish break out above key resistances, taking the price to $0.243, a price point last seen in March 2022.
The golden cross is a technical indicator that appears when the price of security breaks through a key resistance level after a long period of trading in a horizontal channel. However, analysts have warned that for the rally to prevail, XLM must breach the $0.25 and $0.27 resistance levels. A successful push could lead the price to $0.44 and beyond.
However, the daily trading volume declined by 30% in the past 24 hours, with the value standing at $2.02 billion. This decline, together with the increasing prices, indicates that there has been less demand since the recent rally.
Stellar’s Adoption by Institutions
Stellar’s use cases continue to expand, attracting institutional interest. Franklin Templeton, a leading global investment management organization, recently incorporated Stellar for its blockchain transactions. This decision is expected to cut the cost of transactions by 99.75%, from $50,000 in traditional systems to $120 in Stellar.
The efficiency of the network can also do away with the need to reconcile multiple ledgers, thus potentially cutting operational costs by $200 million per year. This is because Stellar has been adopted by the United Nations for global payment systems, increasing its relevance in digital finance.
Furthermore, Jed McCaleb is also interested in space technology through his company, Vast. Rumours of possible partnerships with Elon Musk’s SpaceX suggest that blockchain could be used in space exploration.
