Stellar Lumens (XLM) Price Prediction: XLM Rallies to Yearly High of $0.1963 as It Continues to Mirror Ripple

Stellar Lumens was one of the best-performing cryptocurrencies on Dec. 17 as it continued to mirror Ripple. Ripple and Stellar have a common origin as well.

Stellar Lumens (CRYPTO:XLM) was one of the best-performing cryptocurrencies on Saturday as it continued to mirror Ripple (CRYPTO:XRP).

What Happened: Stellar and Ripple have a common origin. Jed McCaleb, Stellar’s founder, was one of the founding members of Ripple Labs.

Later, McCaleb left to start Stellar, a blockchain network focused on cross-border payments and financial inclusion. Both projects have a similar vision for a more accessible and interconnected global financial system.

Due to this shared history, there is often a correlation between the price movements of their native tokens, Lumens and XRP.

Stellar has often rallied when Ripple was rising. For example, Stellar rallied to a yearly high of $0.1963 in July 2023 when Ripple Labs won a major lawsuit against the Securities and Exchange Commission. In the case, the SEC had accused Ripple of conducting an unregistered, $1.3 billion fundraising via its XRP token. A federal judge ruled in favor of Ripple, stating that the SEC failed to provide sufficient evidence to prove that McCaleb was involved in any wrongdoing related to selling XRP to U.S. investors.

Following this ruling, Ripple Labs settled a case with the SEC, agreeing to pay a $100 million penalty to resolve claims that it sold Lumens improperly.

In addition to Bitcoin’s strength, Stellar also saw strong price action as it continued to recover after hitting a low point earlier in December.

Stellar is also seeing strong fundamentals. For example, its most recent report showed that the number of addresses in the network rose to over 9 million. Also, the number of volume handled in its network soared to $4.9 billion.

Stellar Price Analysis: The daily chart shows that the XLM price bottomed at $0.3535 earlier this month. It then formed a hammer pattern, a popular reversal sign characterized by a long shadow and a small body.

Stellar has remained above the 50-day and 100-day moving averages. It has also formed a bullish engulfing chart pattern, which is characterized by a big bullish candle that covers a previous red candle.

Therefore, Stellar will likely continue rising as bulls target the intermediate resistance point at $0.50, which is about 12% above the current level.

The risk, however, is that the coin may have formed a bearish flag pattern, which may lead to more downside. Such a move would see it retest the support at $0.3535.