Certainly waves are being felt across the cryptocurrency markets, with the ripple effect taking hold. Stellar (XLM) begins to surface, seeking to catch up with significant price gains that Ripple (XRP) has seen. The tokens show a clear trend of moving in a near-perfect tandem, driven by the intertwined history of their development. Stellar appears as a breakaway blockchain payment project from Ripple’s co-founder, Jed McCaleb.
Over the past few weeks, Stellar has surged around 60%, while XRP has mirrored this, both following the U.S. Securities and Exchange Commission ruling for Ripple. Despite the sudden rise, Stellar still lags behind its peak price by around 20%.
However, this excitement comes with a word of caution. With a weekly relative strength index (RSI) at its most overbought levels since April 2021, Stellar faces the risk of a sharp price correction. If this bearish sentiment manifests, Stellar could decline toward its 50-week EMA by September, representing a 30% dip from its current value.
On the flip side, should there be a decisive close above its resistance confluence, Stellar could instead rally toward $0.22, a 45% increase from current price levels. This level served as both support and resistance from June 2021 to April 2022.
In such economically turbulent times, it’s crucial to remember that every investment and trading action carries risk. Even with the potential for high rewards, market participants should practice due diligence and thorough research before making any financial decisions.
Lastly, while not directly related to Stellar or Ripple, some noteworthy news from the African continent. The Central Bank of Nigeria (CBN) continues its commitment to its central bank digital currency (CBDC) project, irrespective of previous leadership changes. With the aim to boost adoption rates, the CBDC mobile app now incorporates Near Field Communication (NFC) technology, allowing convenient and contactless digital payments.
In contrast to expected excitement for such innovation, the eNaira adoption rates have not met expectations. Despite the struggle, former CBN Governor, Godwin Emefiele, criticized commercial banks for stifling the growth of eNaira for their own profitability.
In conclusion, the volatility and prospective gains that cryptocurrencies offer should be balanced with a healthy dose of caution. This is a complex, high-risk investment climate, and adequate research, awareness, and preparedness cannot be emphasized enough.
Source: Cointelegraph
