As the price of Bitcoin (BTC) soared above $99k within the last 24 hours, the altcoin market followed suit, led by the significant volatility in Ripple Labs-backed XRP. Notably, XRP experienced an impressive rally, surpassing the $1.4 mark for the first time since early 2021. This surge represented a remarkable 27 percent increase within just a day. Over the past two weeks, XRP has witnessed a dramatic rise of over 150 percent, pushing its fully diluted valuation to approximately $140 billion, marking a multi-year high. As a result, XRP has unseated Dogecoin (DOGE) to become the sixth-largest digital asset by market valuation.
Factors That Influenced the XRP Rally
End of an Era in the US SEC’s Leadership
One of the primary catalysts for XRP’s sharp price increase was the announcement of Gary Gensler’s resignation from his position as the current chair of the US Securities and Exchange Commission (SEC). With US President-elect Donald Trump poised to appoint a crypto-friendly chair to the SEC, Gensler revealed that he would be stepping down on January 20. Although anticipated, this announcement provided a significant relief to the XRP community, especially in light of the ongoing SEC vs. Ripple lawsuit.
Impact of the Short Squeeze
In the past 24 hours, the cryptocurrency-leveraged market recorded a staggering $406 million in forced liquidations. The majority of these involved short traders, thereby amplifying the effects of the ongoing short squeeze. Notably, more than $25 million was liquidated from XRP leveraged markets. This development has led to a surge in traders longing for XRP, following a successful bullish breakout from a multi-year symmetrical triangular pattern. Additionally, XRP’s weekly Relative Strength Index (RSI) has climbed above the 70 percent mark for the first time since April 2021, signaling a renewed bullish sentiment.
Increased Demand from Whale Investors
XRP’s open interest (OI) has surpassed $2.1 billion for the first time this year, as the digital asset achieved crucial midterm targets. The demand for XRP has seen a significant upswing, as evidenced by its daily average traded volume, which reached approximately $17.3 billion earlier today. On-chain data analysis indicates that XRP whales have been aggressively accumulating the token, anticipating potential legal clarity in the United States in the near future.
How High Can XRP Go?
XRP’s price could potentially aim for its previous all-time high of $3.40, fueled by bullish technical indicators, whale accumulation, and optimistic regulatory developments. Sustained momentum and favorable market conditions will be essential for further growth.
Why is XRP Pumping?
The surge in XRP’s price can be attributed to Gary Gensler’s resignation announcement from the SEC, which has sparked hopes for regulatory clarity. Additionally, a $25 million short squeeze has boosted bullish momentum. Whale accumulation and a breakout from a multi-year triangle pattern have further contributed to the rally.
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