XRP Drops After Record Surge: Will It Hit New Highs Again?

XRP has been through a major market correction where it lost 10.43% to $134.05 billion market capitalization after a strong rally in November. The token skyrocketed by 360% within a month and was 48% up in comparison to Bitcoin in the same timeframe. Nevertheless, as Bitcoin reached the $100,000 mark, which was long anticipated, the upward trend of XRP stalled. 

Bitcoin’s Impact on XRP

Despite most people anticipating that Bitcoin would go below $90,000, its rise has brought focus back to the largest cryptocurrency, hence placing pressure on other cryptocurrencies such as XRP. The market has been led by the rise of Bitcoin, but there has been concern over the fall of XRP.

The decline in its market capitalization can be attributed to the price decrease of the coin, which dropped from $2.57 to $2.25. The trading volume also came down by 36.42% to $26.19 billion. Nevertheless, XRP had a pretty good performance in November, rising by more than some other altcoins even with this adjustment. But this pullback has seen XRP slip off the top three as Tether (USDT) has made a comeback to the third position. By December 5, according to CoinMarketCap, XRP has a market capitalization of $134.05 billion, while Tether is $135.76 billion.

Traders are now asking themselves if this is the end of the climb for XRP or just another dip on the way up. Some people expected the coin to break through the all-time high of $3.84, but now many are sceptical due to the current fall. While some are confident that the price will fall under $2, others still believe that there could be a price rise. This has resulted to the traders to be very hesitant and not quite sure of the way forward for the token.

Exchange Reserves and Market Sentiment

Of special interest is the balance of XRP held by exchanges, as this can provide information on trader behaviour. This means that traders are likely getting ready to sell or exchange their tokens as exchange reserves rise. XRP’s exchange reserves have been on the rise lately, which may mean that the current bullish phase is a profit-taking phase.

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With Bitcoin still going strong and on the path to new achievements, some think that alt coins such as XRP may rebound once Bitcoin’s growth stalls. The price of token is contained within an ascending and expanding channel and has recently broken down from the channel. The RSI is still displaying signals that suggest that the price is likely to follow through and decline further to $1.83 and $1.94. Nevertheless, the low sales volume indicates that there is potential for a reversal if the buying pressure comes back.

The price of Bitcoin is expected to level off at about $108,000, which may open the door for other coins, including XRP. If the upward momentum runs out for Bitcoin, XRP can experience a big bounce, and even surpass the all-time high and move to new heights.

Short-Term Bearish Indicators

However, some indicators imply that XRP could fall even lower in the short-term period, even though it is expected to rise. The Ripple coin is trading at a price that is situated above the short and long-term moving averages, which normally signal a pullback. Also, RSI and Stochastic Oscillator are indicating oan verbought state, which is a bearish divergence. Lastly, the supply of tokens may have been dwindling while demand increased, putting pressure on the price before hitting its potential.

Therefore, while the short-term trend of XRP still remains unclear, many investors are expecting the token to rebound when the Bitcoin growth rate decreases. If Bitcoin hits new highs and altcoins start rallying again, the coin may very well see another jump to new heights. The next few weeks will tell whetthe her token will be able to continue its growth or fall back to the lows.

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