Recent days have witnessed a surprising surge in the value of two tokens, Ripple [XRP] and Stellar [XLM], catching the attention of investors.
While XRP secured its position in the top 10 coin list, the recent uptick in XLM’s price has sparked optimism for its return to the top 20 cryptocurrencies by market capitalization.
Stellar’s Rapid Growth Stalls
Both XLM and XRP saw impressive growth, nearing 100% in the past few days. Consequently, Stellar’s market capitalization surged, placing it at the 21st position among cryptocurrencies by market cap.
This development closed the gap between the 20th spot and XLM’s market cap to slightly over a billion, potentially paving the way for XLM’s reentry to the top 20 list.
However, on-chain data indicated a different trend. Notably, XLM’s trading volume began to decrease, accompanied by a drop in its Weighted Sentiment, signaling a rise in bearish sentiment.
These declining metrics swiftly impacted Stellar’s price performance, with XLM’s value dipping by approximately 10% in the previous 24 hours according to CoinMarketCap’s data.
Currently, XLM is trading at $0.2255 with a market cap of $6.75 billion, possibly influenced by significant selling pressure.
Stellar’s Relative Strength Index (RSI) had been in the overbought territory for some time, potentially prompting investors to sell off their assets to realize profits.
Sell-offs are often followed by price corrections, with the Chaikin Money Flow (CMF) indicating a downturn, further suggesting a sell-off scenario.
XRP Faces a Similar Situation
XRP, like XLM, experienced a price correction. However, XRP holders remained relatively calm as the token’s value only declined by 2%, a stark contrast to XLM’s 10% drop.
As of now, XRP has maintained its position above $1, standing at $1.09.
Meanwhile, the token’s Long/Short Ratio significantly decreased within the 4-hour timeframe, indicating a higher number of short positions in the market, potentially adding pressure on XRP’s declining price.
An analysis of XRP’s daily chart revealed the presence of increased selling pressure, aligning XRP’s fate with that of XLM.
Similarly, XRP’s CMF demonstrated a downtick, while its Relative Strength Index (RSI) signaled overbought conditions, hinting at possible increased selling pressure.