The cryptocurrency market is witnessing a strong recovery. Just one week into the new year, several digital assets are regaining the ground they lost after the market turbulence following a recent event. Ripple’s XRP is among the cryptocurrencies experiencing a surge of 15%, reaching $2.40, a critical level of resistance.
During the period marked by heightened trading activity dubbed as the “Trump pump,” Ripple’s performance against Bitcoin (XRP/BTC pair) indicated a shift in capital as investors diversified their portfolios.
In November, on the day of the election, Bitcoin’s value spiked by a significant 9% in just a day, soaring to $99K in a span of two weeks. However, as Bitcoin’s value reached its peak, the XRP/BTC pair also recorded a substantial gain of over 10%, demonstrating a growing interest in XRP.
Now, with the MACD lines on the brink of forming a bullish crossover pattern, there is a possibility that this trend might repeat. Should Bitcoin hit $100K, XRP could potentially follow suit, aiming for a target of $3 by the end of the month.
Important Considerations for XRP Holders
After a period of consolidation, Ripple is gearing up for a potential breakout. The increase in Open Interest (OI) suggests that more investors are taking long positions in anticipation of a rally in the near future.
Nevertheless, there is a challenge ahead: the zone between $2.40 and $2.46 forms a robust resistance area, and breaking through it could prove difficult without sufficient buying pressure, potentially leading to a reversal in XRP’s price.
Furthermore, the outflows from exchanges remain below 50 million, a significant contrast to the $3 billion withdrawn when XRP hit its yearly high of $2.48.
This indicates that the recent 15% surge may be driven by large whale investors accumulating XRP, possibly influenced by the excitement of the new year rather than widespread interest from retail traders.
Clearly, the path forward is challenging. While Ripple is well-positioned to attract investments from Bitcoin, overcoming the $2.46 barrier could be crucial in achieving this goal. Despite the ongoing Fear of Missing Out sentiment, it remains uncertain whether XRP can gather enough momentum to sustain this upward trend.