The price of XRP has rocketed to a 43-month high, reaching $1.95 on November 30, a 26.5% increase over the previous 24 hours. This peak performance, the best seen since April 2021, seems to be triggered by speculation that Ripple’s RLUSD stablecoin will get the nod from the New York Department of Financial Services in December. However, there are signs that this bull run might hit a pause, with predictors indicating a possible correction of about 20%.
The climb of XRP’s value across an ascending price channel seems to suggest a nearing price correction. Notably, on November 30, XRP hit the channel’s resistance level which has historically catalyzed downward corrections. Additionally, XRP’s relative strength index (RSI) has exceeded 80, indicating a possible buyer fatigue – such high RSI figures have historically paralleled a drop in price.
Likely price corrections could plummet to support levels around $1.75 or further to $1.48, representing a fall of close to 20% from the present levels. Onchain data from Messari also cites that ‘whale’ addresses, which hold at least 100,000 XRP have been gradually reducing their holdings, further signaling a possibility of price correction.
As XRP’s price reaches the resistance limit of its ascending channel (currently at $1.90), Messari data reveals that such ‘whale’ sell-offs are increasing, which could potentially induce a 20% fall in XRP’s value in December.
Prolonged speculation in the XRP derivatives market has led to a massive increase of 37% in open interest over the last 24 hours, marking a record high at $3.19 billion. High risk associated with high leveraged positions in the market can lead to long liquidations when specific price levels where traders’ collateral is inadequate to cover losses. Analyst JA Maartun from CryptoQuant has noted resembling patterns from previous XRP trends, suggesting that long liquidations could be in the offing if asset prices plunge rapidly.