Ripple’s XRP has been the main focus among crypto investors this week as it approached its all-time high, pushing its valuation to over $184 billion.
Stellar (XLM), a popular alternative to Ripple (XRP), has also pumped, reaching a high of $0.5146, its highest level since Dec. 2. It has jumped by 555% from its lowest level in 2024.
Stellar may be seen as a cheaper alternative to XRP because the two have historically exhibited a close correlation. According to CoinHedge, the correlation coefficient over the past seven days was 0.99, and it was 0.85 over the past 30 days. Closely correlated assets often move in the same direction.
This correlation is likely because both coins operate in the same industry. Ripple’s mission is to simplify the cross-border payment industry using RippleNet technology, which connects financial companies globally.
Stellar, on the other hand, provides technology that enables companies to build payment solutions. It is also a popular network for USD Coin (USDC) transactions. Stellar has a partnership with MoneyGram, allowing users to send and receive the stablecoin across MoneyGram’s branches.
Additionally, Stellar’s founder, Jed McCaleb, was also a co-founder of Ripple. This explains why XLM is often considered Ripple’s “cousin,” though it is not a hard fork of XRP.
Additionally, the most reasons why XRP price is rising will positively impact Stellar. For example, an XRP ETF approval will likely lead to an XLM ETF application. This is highly likely because the Grayscale Stellar Lumens Trust, which has a 2.5% management fee, has already attracted over $59 million in assets.
XLM price has more room to retest ATH
Another potential catalyst is that XLM still has room for more gains to reach its record high. Stellar would need to rise by 65% to revisit its 2021 peak of $0.80. In contrast, XRP is already within touching distance of its all-time high.
The weekly chart shows that Stellar’s price has formed a golden cross pattern, where the 50-day moving average crosses above the 200-day moving average. This is one of the most well-known bullish chart patterns in trading.
Stellar is also attempting to retest last year’s high of $0.6350. A confirmed close above this level could signal further gains, potentially pushing XLM toward its all-time high. This makes Stellar an appealing and more affordable alternative to Ripple for investors.
