Stellar (XLM) and Cardano (ADA) have performed exceptionally well against Bitcoin over the past 24 hours, recording 19 percent and 8 percent gains against the dominant cryptocurrency.
At its daily peak, XLM achieved a 25 percent price increase against the US dollar, achieving $0.297. Within a period of 48 hours, the price of XLM rose from $0.21 to $0.297, by more than 38 percent.
To mirror Ripple’s three-fold increase in value in the past seven days, Stellar and Cardano will have to increase by more than 30 percent from their current price range, which is unlikely in the short-term.
But, it is important to acknowledge that dissimilar to the short-term rally of XRP, the short-term increase in the price of XLM and ADA were primarily triggered by optimistic technical indicators and price movement, rather than a series of events and announcements.
Ever since XLM demonstrated a major break out of a descending trendline dating back to mid-July, it was quite evident that a major rally for XLM was in play. Within four days, from September 19 to 23, the price of XLM nearly doubled from $0.17 to $0.29.
Similar to Ethereum and Ripple, Stellar experienced a steep decline in value from July to September, which was the case for most major cryptocurrencies apart from a few exceptions including Bitcoin, EOS, and Binance Coin (BNB).
As such, when the market demonstrated a short-term trend reversal, massively oversold XLM was first to see a major movement to the upside. As soon as XLM recorded a sudden spike in volume on September 19, its momentum continued to increase, mimicking the short-term trend of Ripple.
Prominent cryptocurrency trader who operates under the alias “Crypto Dog” stated on September 20 “after XRP comes XLM, watch out,” implying that historically, XLM has tended to follow the price trend of Ripple.
Perhaps due to the connection of Ripple co-creator Jed McCaleb to Stellar and conceptual similarities between the two platforms in that they both process cross-border transactions for individuals and institutions, the price trend of XLM and XRP have shown consistent correlation throughout 2018.
Over the past few years, the Stellar network has been utilized by companies including IBM, KlickEx, Deloitte, Parkway Projects, Tempo, Wanxiang Labs and Stripe, which funded $3 million to Stellar in 2015 in its early development phase.
Since then, Stellar has continued to maximize the potential of its blockchain protocol, acquiring Chain to form Interstellar, possibly to collaborate more actively with financial institutions.
In 2014, Chain secured investment from Visa and Citi, working with the two financial institutions to make progress in commercializing and integrating the blockchain in the traditional finance sector.
A combination of Stellar’s similar price movement as XRP, the organization’s acquisition of Chain, and optimistic technical indicators regarding its short-term trend reversal led XLM to surge by a large margin in the past week.
ADA has demonstrated similar movement as the early stage of Ripple and Stellar’s corrective rallies this week. Depending on the volume and momentum of Cardano, in the upcoming days, it is possible for Cardano to experience a major movement on the upside.
Featured image from Shutterstock. Charts from TradingView.
Last modified: May 20, 2020 5:58 PM UTC