The reason for the surge of XRP and XLM is this: the passage of the U.S. "GENIUS Act" is expected to support the "U.S. dollar stablecoin"!

Ripple (XRP) and Stellar (XLM) have become the top-performing alts this week, following the wave of Bitcoin (BTC) hitting new highs. Analysts believe that the passage of the U.S. GENIUS Act is the main catalyst, as U.S. bonds are expected to support stablecoins on Ripple and Stellar.

Why did the prices of XLM and XRP surge after the launch of the GENIUS Act?

On Thursday, after the U.S. House of Representatives voted to pass the highly anticipated GENIUS Act, the prices of XLM and XRP surged.

The bill is the first cryptocurrency-related legislation passed by the U.S. Congress, establishing the rules that stablecoins used within the United States must follow. For example, the rules stipulate that all dollar stablecoins will be backed by U.S. dollars and short-term U.S. Treasury bonds.

The rules also stipulate that all stablecoins will be subject to audits, and issuers will regularly disclose information.

Analysts believe that as stablecoins become increasingly mainstream in the United States and other countries, these rules will help enhance consumer confidence.

These rules will also attract more companies and users to use stablecoins. Some companies such as Walmart, Amazon, and Citigroup have already explored the use of these stablecoins.

The "GENIUS Act" will have an impact on Stellar and Ripple, as their business models both incorporate stablecoin elements. Stellar focuses on global payments, primarily using the USDC stablecoin.

The latest data from Artemis shows that its USDC trading volume has significantly increased in the past few weeks.

The supply of stablecoins on Stellar has surged by 18% over the past 30 days, reaching $181 million, while the number of addresses has also jumped to 258,000. During this period, Stellar's trading volume exceeded $1.6 billion.

The "GENIUS Act" has also impacted XRP, as the company launched the RLUSD dollar stablecoin. The RLUSD stablecoin is backed by the US dollar and has currently accumulated over $520 million in assets.

In the coming months, this stablecoin may continue to grow, especially in the case where USDT is delisted in the United States. Unlike RLUSD, USDT is backed by both the US dollar and other assets such as gold and Bitcoin.

XRP Price Analysis

The daily chart shows that the price of XRP has rebounded strongly this month, ending an eight-month consolidation period. Currently, the price of XRP has broken through the upper trend line of the symmetrical triangle pattern.

The token has also surpassed the high of $3.3815 from the beginning of the year to date. It remains above the 50-day and 100-day moving averages, while the Relative Strength Index (RSI) and other oscillating indicators are pointing upwards.

As a result, with bulls targeting the key resistance level of $4.26, the token may continue to rise. This target price is derived by measuring the depth of the bullish flag pattern and inferring from the breakout point.

(Source: Trading View)

XLM Price Analysis

XLM has made a strong rebound this month. This surge occurred after it formed a double bottom pattern at $0.2175 and established a neckline at the peak of $0.3352 on May 12.

The token has broken above the 50-day and 100-day exponential moving averages (EMA), and it has also formed a bullish triangular flag pattern, indicating that it will rise further in the coming months. If this occurs, the token will surge to its highest point since November at $0.6353.

(Source: Trading View)