In a remarkable turn of events, the cryptocurrency market witnessed a significant price rally, with Bitcoin (BTC) surpassing $99k in the past 24 hours. Amidst this market upheaval, XRP, the digital currency backed by Ripple Labs, demonstrated notable volatility and price gains. For the first time since early 2021, XRP’s price exceeded $1.4, reflecting a 27% increase within a single day. Over the past two weeks, XRP’s value has surged by more than 150%, propelling its fully diluted valuation to reach a multi-year peak of approximately $140 billion. This remarkable growth has resulted in XRP surpassing Dogecoin (DOGE) to claim its position as the sixth-largest digital asset by market valuation.
Factors that Influenced XRP Rally
The End of an Era in the US SEC’s Leadership
The recent announcement of Gary Gensler’s resignation as the chair of the US Securities and Exchange Commission (SEC) has significantly impacted XRP’s price dynamics. With President-elect Donald Trump expressing interest in appointing a crypto-friendly chair to lead the SEC, Gensler’s decision to step down by January 20 has been met with enthusiasm within the XRP community. This development comes in the wake of the SEC vs Ripple lawsuit’s appeal, providing a sense of relief and optimism regarding potential regulatory changes.
The Impact of a Short Squeeze
Over the past 24 hours, the cryptocurrency leveraged market experienced forced liquidations amounting to $406 million, primarily affecting short traders. This situation has amplified the effects of the ongoing short squeeze, with over $25 million liquidated from XRP leveraged markets alone. As a result, more traders are now optimistic about XRP’s future, encouraged by a successful bullish breakout from a long-standing symmetrical triangular pattern. Additionally, XRP’s weekly Relative Strength Index (RSI) surged above the 70% mark for the first time since April 2021, signaling renewed bullish sentiment.
Increased Demand from Whale Investors
XRP’s open interest (OI) has surpassed $2.1 billion for the first time this year, reflecting increased interest and investment as the cryptocurrency reached key midterm targets. The rise in demand is evident from XRP’s daily average traded volume, which reached approximately $17.3 billion earlier today. On-chain data analysis reveals that XRP whales have been actively accumulating the asset, anticipating potential legal clarity in the United States in the near future.
Future Prospects for XRP
With the current momentum, XRP’s price has the potential to aim for its previous all-time high of $3.40. This goal is supported by bullish technical indicators, strategic whale accumulation, and optimistic regulatory outlooks. For continued growth, sustained market momentum and favorable market conditions are crucial.
Reasons Behind XRP’s Recent Surge
XRP’s recent price surge can be attributed to several factors, including the announcement of Gary Gensler’s resignation from the SEC, sparking hopes for regulatory clarity. Additionally, a $25 million short squeeze has further bolstered bullish momentum. Whale accumulation and a breakout from a multi-year triangular pattern have also contributed to the ongoing rally.
