XRP has been the spotlight of the crypto community, hitting its highest price in over three years. Designed as a solution for fast and affordable cross-border payments, XRP has always been a standout in the cryptocurrency space.
Developed by Ripple, the token has gained attention not just for its innovative use case but also for its ability to process transactions in seconds at a fraction of the cost of alternatives like Bitcoin or Ethereum. However, as XRP’s price surges toward $2.00, technical indicators and investor behaviour suggest that the rally might be reaching a turning point.
Ripple has consistently marketed XRP as a bridge currency for global financial institutions, and this narrative has fueled its adoption despite significant challenges, including its ongoing legal battle with the U.S. Securities and Exchange Commission (SEC). This resilience has made XRP one of the most-watched assets in the market. Yet, as it approaches key price levels, the question remains: is this the beginning of a sustained bull run, or are we about to see a correction?
Is XRP’s Momentum Slowing?
XRP has been trading in an ascending channel, which has supported its impressive 267% rally this month. This surge has brought the token to $1.84, just shy of the significant $2.00 level, a key psychological barrier for traders.
However, technical indicators suggest the rally may be losing steam. The Relative Strength Index (RSI) on the 4-hour chart has climbed past 80, signalling overbought conditions. Historically, such levels have been a precursor to price pullbacks as buyer momentum begins to weaken.
If XRP sees a correction, the price could drop to around $1.75, aligning with the lower boundary of the ascending channel. A deeper pullback could see the token testing the 50-day Exponential Moving Average (EMA) at $1.48, marking a potential 20% drop from its current price. These are critical levels to watch, as they could determine whether XRP’s bullish structure remains intact or shifts into a consolidation phase.
Adding to this cautious outlook, on-chain data from Messari shows that whale investors—wallets holding at least 100,000 XRP—have reduced their holdings. The total supply held by these wallets peaked at 90.73 billion XRP on November 24 but has since decreased by 30 million tokens. This selling activity indicates that some large investors are taking profits at current levels, a common practice when prices reach multi-year highs.
Meanwhile, speculative interest in XRP has spiked. The derivatives market has seen a 37% increase in open interest (OI) over the past 24 hours, reaching a record $3.19 billion. While this reflects heightened trader enthusiasm, it also suggests increased volatility, as such rapid surges in speculative activity often lead to sharp market movements in either direction.
Will XRP Break Through $2.00?
The $2.00 price point is more than just a number; it represents a critical psychological and technical level for XRP. If the token can break above this barrier and sustain its price, it could trigger another wave of buying interest and set the stage for further upside. A strong close above $2.00 would reinforce market confidence and might attract both retail and institutional investors looking to ride the momentum.
However, achieving and maintaining this milestone won’t be easy. The overbought RSI and profit-taking by whale investors suggest that the market could be due for a breather. Additionally, while the spike in open interest signals excitement, it also heightens the risk of increased volatility. A failure to hold above $2.00 could lead to a period of consolidation or even a more pronounced correction.
XRP’s performance in the coming weeks will likely depend on how the market reacts to these critical levels. If buyers can step in and absorb selling pressure, it could pave the way for new highs. On the other hand, if selling continues and the price falls below $1.75, the bullish momentum could falter, leaving XRP in a more precarious position.
Conclusion
XRP’s recent rally has been nothing short of remarkable, capturing the attention of traders and investors worldwide. Its ability to surge to multi-year highs, despite ongoing regulatory challenges, underscores the strength of its fundamentals and the confidence of its supporters.
However, as the price nears the $2.00 mark, signs of exhaustion are beginning to show. Technical indicators like the RSI and on-chain data pointing to whale profit-taking suggest that caution may be warranted.
Whether XRP can break through $2.00 and sustain its bullish momentum will depend on how the market handles the current selling pressure. A move above this key level could open the door to further gains, while a pullback could provide an opportunity for the market to consolidate before another attempt higher. One thing is certain—XRP remains one of the most intriguing assets in the crypto space, and its next move will be closely watched by traders and investors alike.
Editor: Lydicius
