Originally published on: November 27, 2024
XRP has experienced a significant drop of over 17% just four days after hitting a multi-year high of around $1.63, currently trading at approximately $1.41 as of Nov. 27. Despite this recent downturn, the cryptocurrency has managed to maintain its impressive gains, with a nearly 180% increase in its best month since April 2021, known as the “Trump Trade.”
The relative strength index (RSI) levels for XRP have remained above 70 on the daily chart throughout November, indicating a potential exhaustion of the current uptrend. Historical data reveals that XRP has a tendency to correct sharply after reaching overbought RSI levels, leading to significant price drops.
The current price levels align with Fibonacci retracement extensions, suggesting that XRP’s breakout may face resistance near the $1.09 mark and could potentially drop towards the $1 level by December. A correction could see the $1 psychological level acting as a short-term support, with a deeper pullback potentially revisiting the 50-day exponential moving average (EMA) near $0.85.
Interestingly, XRP’s correction coincides with a decrease in supply held by its largest investors, indicating a shift from accumulation to distribution. This trend among whales could impact the market dynamics, as they typically accumulate tokens during periods of consolidation, only to distribute them during price spikes.
Looking at the weekly price chart, XRP is currently in a long-term uptrend after breaking out of a giant symmetrical triangle pattern. This breakout is reminiscent of a similar pattern that preceded XRP’s historic rally in 2017-2018, suggesting the potential for further gains in the future.
Fundamentally, developments such as a possible resolution of the SEC versus Ripple battle and partnerships like Ripple’s collaboration with Archax could further boost XRP adoption. However, the 6-week RSI has climbed to 70, indicating the possibility of short-term corrections or consolidation periods.
While a retest of the upper trendline near $1.00 cannot be ruled out, XRP’s overall outlook remains positive, with long-term projections targeting higher price levels. As always, it’s important for investors to conduct their own research and consider the risks before making any investment decisions.
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