Ripple’s XRP has surged to become the third-largest cryptocurrency by market capitalisation, surpassing notable tokens such as Solana, USDT, and Binance Coin, as the landscape for crypto-friendly policies begins to shift in Washington, D.C.
On Monday, XRP skyrocketed by an impressive 40% within 24 hours, reaching $ 2.80- a milestone it hadn’t achieved in seven years. The cryptocurrency has attracted over $120 billion in new investments, pushing its market cap to $156 billion following the Nov. 5 election of Donald Trump and other pro-crypto candidates.
Crypto News reports that the primary driver behind XRP’s rally was Trump’s victory, expected to usher in more favourable regulations for the crypto sector. This is particularly significant for Ripple Labs, embroiled in a legal battle with the Securities and Exchange Commission since 2020.
The election results have also revived hopes for a spot XRP exchange-traded fund (ETF) by 2025. Earlier this week, asset manager WisdomTree, which oversees $111 billion in assets, applied for a spot Ripple ETF.
In a recent X post, CryptoQuant CEO Ki Young Ju emphasized that whale activity on Coinbase has been a major driver of the XRP rally, with exchange premiums rising between 3% and 13%. In contrast, South Korea’s Upbit exchange- known for its significant XRP trading base-has shown no such premium during this period.
Coinbase whales are driving this $XRP rally.
Over the past 30 days, Coinbase’s minute-level price premium has ranged from 3% to 13% during the surge.
Meanwhile, Upbit—a Korean exchange with more XRP investors than Binance—has shown no significant premium so far. pic.twitter.com/ENESB2Zrkv
— Ki Young Ju (@ki_young_ju) December 2, 2024
According to Santiment, a leading analytics firm, wallets holding between 1 million and 10 million XRP accumulated 671 million coins within three weeks. This marked the first notable increase in non-empty wallets in eight years, fueled by FOMO-driven buying.
? XRP has skyrocketed to an astounding $2.49 market value for the first time since January 8, 2018. The 6-year (nearly 7-year) high comes as wallets with 1M-10M XRP have accumulated 679.1M tokens (currently worth $1.66B) in just 3 weeks. Also, total non-empty XRP wallets have… pic.twitter.com/bIsfOqdCQX
— Santiment (@santimentfeed) December 2, 2024
However, Ripple’s price could face a potential pullback in the coming weeks. Currently, XRP is trading well above its short- and long-term moving averages, suggesting the possibility of mean reversion, where prices tend to return to their average levels over time.
Moreover, technical indicators like the Relative Strength Index (RSI) and Stochastic Oscillator signal overbought conditions, indicating potential price weakness. XRP may also be in the markup phase of the Wyckoff Method, a stage characterized by demand exceeding supply. This phase is often followed by the distribution phase, typically resulting in a sell-off.
If a pullback occurs, XRP could retreat to retest support at $1.9697, a critical level last reached in April 2021.