Originally published on: November 27, 2024
XRP has recently experienced a significant drop of over 17% after hitting a multi-year high of around $1.63, now trading at approximately $1.41 as of Nov. 27. Despite this decline, the cryptocurrency has seen impressive gains of nearly 180% in its best month since April 2021, maintaining its “Trump Trade” profits.
With XRP’s relative strength index (RSI) levels consistently above 70 on the daily chart throughout November, there are indications of a potential exhaustion of its current uptrend. Historical data reveals XRP’s tendency to correct sharply after reaching overbought RSI levels, highlighting the possibility of a significant downturn.
The current price levels align with Fibonacci retracement extensions, with the breakout surpassing key resistance levels. This suggests that XRP may drop towards the $1 level by December, with potential support at the psychological level of $1.
Additionally, a slight decrease in the supply held by top XRP investors suggests a potential shift from accumulation to distribution. This could impact the market dynamics and contribute to a correction in XRP’s price.
Despite the short-term corrections, XRP remains in a long-term uptrend stage, displaying similarities with previous breakout patterns that led to significant rallies. Fundamentals also support a bullish outlook, with potential developments like a resolution in the SEC versus Ripple battle and new partnerships further boosting XRP adoption.
While the 6-week RSI has reached a threshold that historically precedes corrections, a pullback to retest key support levels cannot be ruled out. Investors should conduct their own research and analysis before making any investment decisions.
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