Stellar (XLM) Mimics Ripple's (XRP) Impressive Rally, Why Is This So?

Stellar (XLM) has experienced a significant surge in volume, reaching its highest levels since May 2021. This uptick coincides with Ripple's (XRP) unexpected rally to $1 on Saturday, November 16.

Stellar (XLM) price surged by 30% on Saturday, November 16, following Ripple’s (XRP) unexpected rally to $1. However, XLM’s impressive gains can be attributed to its close correlation with XRP, which is influenced by two key factors.

Firstly, Stellar was co-founded by Jed McCaleb, the former co-founder of Ripple. Both projects are focused on blockchain-based cross-border payments, leading to a close link in their fundamentals.

Secondly, XRP and XLM are both affected by the SEC’s lawsuit against Ripple, which began in December 2020. The outcome of this case could have significant implications for both cryptocurrencies.

According to data from Santiment, XLM’s trading volume has surged to $2.96 billion at the time of writing. This rise in volume indicates growing buying pressure on the altcoin and a noticeable increase in market interest.

The last time XLM experienced such high volume levels was during the 2021 bull market, a period when cryptocurrency assets saw market-wide rallies.

Now, let’s take a closer look at some of the key factors that might be contributing to this close correlation between XRP and XLM.

Stellar, initially known as Stellar Lumens, was founded in 2014 by Jed McCaleb, who also co-founded Ripple in 2012. McCaleb left Ripple in 2013 and went on to launch Stellar, aiming to create a decentralized payment network.

Both Ripple and Stellar are focused on facilitating fast and low-cost cross-border payments, using their native cryptocurrencies XRP and XLM, respectively.

This shared vision and approach have led to comparisons and discussions regarding the two projects and their cryptocurrencies throughout the years.

Moreover, both XRP and XLM have been impacted by the SEC’s lawsuit against Ripple, which began in December 2020. The lawsuit alleges that Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen engaged in an unregistered securities offering by selling XRP tokens.

Ripple has maintained that XRP is not a security and that the SEC’s case is flawed. The outcome of this case could have significant implications for XRP, Ripple, and potentially other cryptocurrencies.

Throughout 2023, XRP price has shown sensitivity to news and developments related to the lawsuit. Investors and traders have been closely monitoring updates from the case, which could explain the attention and interest in XRP’s price movements.

As XRP fiyatı rallied and crossed the $1 mark on Saturday, a positive sentiment and buying interest seemed to extend to other cryptocurrencies, including XLM, due to their close correlation.