In a remarkable turn of events, Ripple Labs-backed XRP has surged past Solana (SOL) and Tether (USDT) to become the third-largest cryptocurrency by market capitalization. On December 2nd, during the early Asian trading session, this large-cap altcoin experienced a significant price increase of over 25%, reaching approximately $2.4.
With a market cap of roughly $140 billion and a fully diluted valuation exceeding $240 billion, XRP’s daily average traded volume witnessed a 45% spike, reaching about $23 billion. Such impressive growth highlights the dynamic nature of the cryptocurrency market and XRP’s potential to influence the digital currency landscape.
Why Did XRP Experience a Surge?
The recent surge in XRP’s price can be attributed to various factors, one of which is the election of pro-crypto leaders in the United States. With President-elect Donald Trump and other crypto-friendly officials taking charge, there is growing optimism that the longstanding legal issues stemming from the US SEC charges might be resolved soon. This positive sentiment is expected to continue as a new SEC chair is anticipated to be confirmed early next year.
Another crucial element contributing to XRP’s rise is the significant liquidation of short traders. Coinglass data reveals that XRP’s leveraged market led to liquidations exceeding $50 million within the past 24 hours, with more than $36 million involving short positions. This scenario has increased the likelihood of a short squeeze, thereby enhancing XRP’s bullish momentum.
Moreover, on-chain data indicates heightened activity from whale traders, particularly those linked to Ripple. For example, Ripple unlocked 1 billion XRP units from its escrow account and subsequently relocked over 800 million units. Additionally, several whale investors have been observed withdrawing substantial amounts of XRP from exchanges such as Upbit and Binance, further fueling the altcoin’s upward trajectory.
What Lies Ahead for XRP’s Price?
Following an impressive 280% increase in November, XRP has successfully broken out of a multi-year triangular consolidation pattern. The veteran altcoin is now poised to retest its all-time high (ATH), last achieved in 2018, after surpassing its peak during the 2021 bull cycle.
From a technical analysis perspective, XRP has entered a much-anticipated parabolic phase, which could potentially lead to further gains in the coming months. The weekly Relative Strength Index (RSI) has surged above the 85% threshold for the first time since 2021, indicating that the bulls are firmly in control of the market.
However, traders should remain vigilant for potential corrections following such a significant bullish breakout. While the current trend appears favorable, market volatility may lead to short-term pullbacks before the upward momentum resumes.
In conclusion, XRP’s rise to become the third-largest cryptocurrency marks a pivotal moment in the digital currency sphere. As market dynamics continue to evolve, XRP’s performance will be closely watched by investors and enthusiasts alike, eager to see how it navigates the path ahead.
