In an unexpected turn of events, XRP, the digital asset backed by Ripple Labs, has leapfrogged Solana (SOL) and Tether (USDT) to secure its position as the third largest cryptocurrency by market capitalization. On Monday, December 2, XRP experienced a remarkable surge of over 25%, reaching approximately $2.4 during the early Asian trading session. This substantial increase reflects the growing confidence in the utility-based altcoin, which now boasts a market cap of around $140 billion and a fully diluted valuation exceeding $240 billion. Furthermore, XRP witnessed a 45% rise in its daily average traded volume, reaching approximately $23 billion at the time of reporting.
Understanding the Surge: Why Did XRP Rise?
The remarkable ascent of XRP can be attributed to a confluence of factors that have positively influenced its price. As reported by Coinpedia, the election of pro-crypto leaders in the United States, spearheaded by President-elect Donald Trump, has been a significant boon for XRP. This political shift is expected to lead to the resolution of long-standing legal challenges stemming from US SEC charges, with a new SEC chair anticipated to be confirmed early next year.
Additionally, the recent surge is partly driven by the substantial liquidation of short traders. Data from Coinglass reveals that XRP’s leveraged market led in liquidations over the past 24 hours, totaling more than $50 million, with over $36 million involving short traders. This has heightened the likelihood of a short squeeze, further propelling XRP’s bullish momentum.
Moreover, on-chain data indicates a notable uptick in whale trading activity, led by Ripple. Notably, Ripple unlocked 1 billion XRP units from its escrow account while locking back over 800 million units. Simultaneously, whale investors have been withdrawing significant amounts of XRP from various exchanges, prominently Upbit and Binance.
The Future of XRP: What Lies Ahead?
After an impressive 280% surge in November, XRP has successfully broken free from a multi-year triangular consolidation pattern. This veteran altcoin is now poised to challenge its all-time high (ATH), established in 2018, after surpassing its peak during the 2021 bull cycle.
From a technical analysis perspective, XRP has entered a highly anticipated parabolic phase, suggesting the potential for further gains in the coming months. The weekly Relative Strength Index (RSI) has surged above 85% for the first time since 2021, indicating that the bulls are firmly in control of the market.
Nevertheless, XRP traders should exercise caution and remain vigilant for a potential correction following the substantial bullish breakout. Such corrections are not uncommon and often precede a continuation of the upward trend.
In conclusion, XRP’s remarkable rise to become the third largest cryptocurrency by market capitalization underscores the dynamic nature of the crypto market. As investors and traders closely monitor the developments surrounding XRP, the digital asset’s future trajectory remains an exciting prospect in the ever-evolving world of cryptocurrencies.
