Originally published on: November 30, 2024
XRP has seen a remarkable 26.50% surge in the past 24 hours, reaching $1.95 on Nov. 30, its highest level since April 2021. The driving force behind this rally seems to be the speculation surrounding the potential approval of Ripple’s RLUSD stablecoin by the New York Department of Financial Services (NYDFS) in December.
Despite this impressive run, there are at least three indicators suggesting that a correction may be on the horizon for XRP in the coming days. The first red flag is the prevailing ascending channel that XRP has been following. As it reached the resistance level of this channel on Nov. 30, the likelihood of a near-term correction has increased significantly.
Moreover, the relative strength index (RSI) on the 4-hour chart has entered overbought territory, signaling potential buyer exhaustion. Historically, such levels of RSI have often coincided with price drops, indicating that a downward move could be in store for XRP.
Whale addresses holding substantial amounts of XRP have been reducing their balances as the token nears its recent local highs. This trend, combined with the resistance of the ascending channel, suggests that a 20% price decline in December is not out of the question.
In the derivatives market, XRP 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 raises concerns of leverage-driven trades that could lead to long liquidations, further accelerating price declines if the market turns.
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