Originally published on: November 27, 2024
XRP has seen a significant drop of over 17% just days after hitting a multi-year high of approximately $1.63, currently trading around $1.41 as of Nov. 27. Despite this recent dip, the cryptocurrency has been able to maintain its “Trump Trade” gains, soaring by nearly 180% in its most profitable month since April 2021.
The relative strength index (RSI) for XRP has consistently been above 70 on the daily chart throughout November, indicating a possible exhaustion of its upward trend. Historical data suggests that after reaching overbought RSI levels, XRP tends to experience sharp corrections. For example, in June 2023, XRP’s price plummeted by 46.5% in less than two months after its daily RSI surpassed 85 during a rally to $0.82.
Currently, the price of XRP aligns with Fibonacci retracement extensions, with the recent breakout surpassing the 2.618 Fibonacci extension near $1.09. This level is now acting as a strong resistance, potentially leading XRP to drop towards the $1 mark, in line with the 1.618 Fibonacci extension, by December.
In the event of a correction, the $1 psychological level could serve as a temporary support, while a more substantial pullback may see XRP revisiting the 50-day exponential moving average (EMA) near $0.85.
Interestingly, the recent decline in XRP’s richest investors’ holdings may suggest a transition from accumulation to distribution phase. This behavioral shift often occurs when whale investors sell off their holdings to retail buyers amid price spikes.
On a weekly chart, XRP appears to be in a long-term uptrend following a breakout from a massive symmetrical triangle pattern. This breakout mirrors a similar move that preceded XRP’s historic rally of 43,650% in 2017-2018.
Fundamentally, XRP’s prospects look positive, with potential catalysts like Donald Trump’s reelection and Ripple’s partnership with UK-based Archax to launch a tokenized money market fund on the XRP Ledger. These factors could further drive XRP adoption and price appreciation.
Despite the bullish outlook, the 6-week RSI reaching 70 suggests a possible short-term correction or consolidation phase. A pullback to retest the triangle’s upper trendline near $1.00 is plausible, aligning with the daily chart analysis.
As always, it is essential to conduct your own research and due diligence before making any investment decisions, as this article does not provide personalized investment advice. Stay informed and subscribe to our newsletter for more market insights and analysis.