As a seasoned crypto investor with over a decade of experience in this dynamic market, I have learned to navigate through the unpredictable waters of cryptocurrencies with a keen eye and open mind. David Schwartz’s recent insights into the correlation between XRP and Stellar (XLM) has piqued my interest, as it aligns with my own observations over the years.
Building on a conversation about XRP that started in March, Ripple‘s Chief Technology Officer, David Schwartz, has shared fascinating perspectives about the connection between XRP and Stellar (Stellar’s token is XLM).
Schwartz candidly acknowledged, “I’m not certain about the elements determining the value of XRP,” which may appear unexpected from someone instrumental in designing the XRP Ledger. However, it could suggest a complex interplay of market forces impacting the fluctuations in XRP pricing.
The Ripple CTO went on to make a major observation: “The only real objective data point I have is that XRP tracks the price and market cap of XLM incredibly well over all time frames.”
It appears that the path taken by XRP and XLM is very similar, indicating a close relationship between their development, despite the intricate factors shaping their price movements. XRP and XLM share a common heritage, as XLM was developed by Jed McCaleb, who co-founded Ripple but later departed to establish Stellar. While both tokens aim to simplify cross-border transactions, they cater to distinct markets and have unique applications.
According to Schwartz’s findings, it appears that the factors shaping one of these cryptocurrencies can sometimes impact the other. Yet, the specific explanations for this correlation are still open to interpretation, as Schwartz pointed out that the factors driving XRP‘s price are not entirely clear-cut.
XRP price action
Currently, at the point of composition, XRP, which ranks seventh among cryptocurrencies based on market capitalization, has experienced a growth of 1.31% over the past 24 hours, reaching a value of $0.5677. Meanwhile, many other cryptocurrencies in the market have been trading in negative territory.
After a week of erratic, lateral price movements, XRP bounced back from its lowest point of $0.546 during the previous trading day.
If XRP maintains its ongoing recovery and surpasses $0.58, it could indicate that bulls are strongly guarding this position. Afterward, XRP might climb to $0.64, but investors will need to overcome this barrier before targeting the next level at $0.74.
If there’s an economic downturn, XRP could potentially aim for the daily Simple Moving Average (SMA) 200 at around $0.551. On the other hand, bears might try to increase their control by pushing the XRP price below its current support level of $0.54. If they manage to do so, XRP could drop to approximately $0.46, which might prolong its period of range trading.
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2024-08-31 13:48