Ripple's XRP Performance: November to December 2024 Overview
In recent weeks, Ripple's XRP has been a focal point for investors, showcasing notable performance from late November into early December 2024. The cryptocurrency has captivated the market, revealing sharp increases in capital deployment. However, hints of a potential corrective downturn have raised eyebrows among traders.
XRP Hits New Heights
On December 3, XRP reached an extraordinary milestone with an all-time high market capitalization of $165.74 billion, while each token was valued at $2.90. Despite this remarkable achievement, XRP still trades below its all-time high price of $3.40.
This rally has propelled XRP to the position of the third most valuable cryptocurrency by market cap, overtaking notable rivals like Solana (SOL) and Tether (USDT). The soaring market cap reflects a robust demand for XRP, even as Ripple persists in its ongoing token unlocks and sales, which are driving inflation in the circulating supply.
Ripple's Future Plans
As the largest holder of XRP, Ripple is reportedly gearing up for what might be its final significant sale of 2024. This impending sale has sparked discussions about its impact on future token supply and market performance.
Technical Indicators Suggest Market Fatigue
As demand for XRP peaks, technical indicators indicate potential market fatigue. Since November 11, the daily relative strength index (RSI) for XRP has consistently remained above 75, indicating an overbought condition. At its peak market cap, the RSI reached an alarming 95 points, a threshold often linked to upcoming corrections in market trends.
The weekly RSI also echoes concerns, currently standing at 91.17. Historical data shows that when XRP's weekly RSI reached similar extremes, it often preceded substantial declines, with one notable drop nearly reaching 80% between November and December in 2020.
Warning Against Excessive Leverage
The trading community is receiving cautionary tales from decentralized finance analyst Andrei. He has advised against the prevailing trend of excessive leverage among traders. His insights, supported by CoinGlass's funding rate heatmap, illustrate an imbalance in the market that is heavily skewed towards long positions.
Currently, XRP long position traders are mandated to pay short-sellers an exorbitant 66% annual percentage rate (APR) funding rate. This scenario presents a potential long squeeze, foreboding a decrease in XRP's price.
Conclusion
As Ripple's XRP continues to capture the interest of traders and investors, the imminent risks posed by market exhaustion and technical indicators cannot be overlooked. Those engaged in trading XRP must maintain vigilance to navigate the unpredictable dynamics of the cryptocurrency market.
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