Originally published on: November 30, 2024
XRP has skyrocketed by 26.50% in the past day, reaching $1.95 on Nov. 30, its highest level since April 2021. The driving force behind this rally is speculation that Ripple’s RLUSD stablecoin will receive approval from the New York Department of Financial Services (NYDFS) in December.
Despite this impressive surge, several indicators suggest that a correction may be on the horizon for XRP in the near future, potentially leading to a 20% drop from current levels.
One of the warning signs of an imminent correction is the prevailing ascending channel that XRP is trading in. On Nov. 30, XRP hit the resistance level of this channel, indicating a possible downturn. Historical data shows that previous corrections have occurred after XRP reached this same resistance level.
Additionally, the relative strength index (RSI) for XRP on the 4-hour chart has entered overbought territory, exceeding 80, which typically signals buyer exhaustion and often precedes price drops.
If XRP prices do fall, they could test support levels near $1.75 or even drop further to the 50-EMA at $1.48, representing a 20% decline from current levels.
Furthermore, large whale addresses holding at least 100,000 XRP have started reducing their balances as XRP approaches its recent highs. This suggests that some whales are selling off their holdings at these levels, indicating a possible downside scenario for the cryptocurrency.
The XRP derivatives market has seen a 37% increase in open interest (OI) in the past 24 hours, reaching a record high of $3.19 billion. This surge in speculative activity could lead to heightened volatility and potential long liquidations in the market.
Investors should be cautious and conduct their own research before making any investment decisions. Stay informed with critical insights on the markets by subscribing to the Markets Outlook newsletter for valuable information every Monday.