Stellar (XLM) accelerates, heading towards $0.51 as the market awaits the verdict in the Ripple – SEC case.

Stellar (XLM) continues to soar, increasing nearly 5% at the time of writing on Friday, extending an impressive breakout of 10% from the previous trading session.

The strong increase of this cross-border payment token is driven by positive developments from its "industry brother" Ripple – as the company has just filed a motion to dismiss the years-long lawsuit with the U.S. Securities and Exchange Commission (SEC), signaling a new chapter that could soon unfold for the entire industry.

Technical signals and derivative data are both supporting Stellar's next upward trend, with a clear breakout from the price channel along with a 40% increase in open contracts – indicating that money is strongly flowing back into XLM.

Stellar breaks through thanks to Ripple and SEC's joint proposal to dismiss the lawsuit

Ripple – the entity behind the cross-border payment token XRP – along with the U.S. Securities and Exchange Commission (SEC) has agreed to file a motion to dismiss the lawsuit in the Second Circuit Court of Appeals on Thursday. This move immediately triggered a strong wave of "risk-on" (risk-on) sentiment in the XRP investor community.

The prospect of closing the prolonged legal battle not only ignites an optimistic sentiment around XRP but also creates a positive spillover effect to Stellar – Ripple's direct competitor. As a result, the market is leaning entirely towards a bullish trend. In the past 24 hours, both XRP and XLM recorded double-digit gains, reflecting the increasingly solidified confidence of investors.

Increased interest leads to a 40% rise in open contracts for XLM

The growing interest in Stellar (XLM) has triggered a strong inflow of capital into futures and options contracts, as investor sentiment has clearly shifted positively. According to data from CoinGlass, the open interest (OI) of XLM has increased by nearly 40% in just the past 24 hours, rising to 434.04 million USD – a figure that illustrates the heat of the derivatives market.

Alongside the increasing flow of funds, liquidation data shows a clear disparity leaning towards the bulls. While the amount of Long positions liquidated only reached $351,490, the short positions that were "swept away" amounted to $1.17 million – indicating that the bears are suffering heavy losses.

This imbalance has pushed the long/short ratio up to 1.0173, clearly reflecting the dominance of long positions.

XLM derivatives data | Source: CoinglassWith increased capital flow, the long position dominates and the price of XLM is on the rise, the current market picture shows that the bulls are in a leading position – an important factor that may continue to drive a strong recovery in the near future.

XLM may continue its breakout rally as buying pressure increases.

The recent recovery has helped the price of XLM break above the parallel channel on the 4-hour time frame (see the chart below). This cryptocurrency has surpassed a key resistance level at the 50% Fibonacci retracement level — located at $0.4389, measured from the peak of $0.5166 set on July 14 to the bottom of $0.3613 last Sunday. Currently, the bulls are aiming for the next target at the 78.6% Fibonacci level at $0.4834.

If XLM can convincingly close above this level, the bullish trend may continue to push the price close to the old peak of $0.5166 — equivalent to an increase of more than 11% from the current level.

In addition, the 50-day exponential moving average (EMA) is approaching the 100-day EMA, opening up the possibility of forming a golden cross (golden cross) — an important buy signal that often attracts the attention of investors who are on the sidelines when the short-term trend may surpass the long-term trend.

XLM/USDT daily chart | Source: TradingViewTechnical indicators also support the bullish trend: both the MACD and the signal line are trending upwards, indicating that the bullish momentum is being strengthened. Meanwhile, the relative strength index (RSI) has reached the threshold of 76, pushing XLM into the overbought zone — reflecting a distinctly increasing buying pressure.

However, if the bulls cannot maintain the current upward momentum, a correction scenario to the Fibonacci level of 50% at $0.4389 could completely occur.

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