Ripple's XRP eyes new all-time high, key factors to consider after ...
Ripple's XRP continued its rally with a 25% surge on Monday, stretching its monthly gains to over 430%. Following the recent uptrend, the remittance-based token now ranks #3 among top cryptocurrencies despite witnessing a mix of bullish and somewhat bearish investor actions in the past few days.
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According to Santiment data, XRP has been seeing heightened buying activity from investors in the past three weeks following its recent surge.
Whales holding between 1M-10M of the remittance-based token bought 679.1 million XRP, now worth ~$1.8 billion. This comes as the non-empty XRP wallets surged above 5.5M for the first time since launch.
XRP investors have also woken up as weekly active addresses on the XRP Ledger increased nearly 200% to 307K in the past month — its highest level since August 2023.
XRP Supply Distribution (1M-10M), Weekly Active Addresses & Holders | Santiment
The bullish view is also evident in XRP Coinbase premium, which showed that US traders have likely been fueling the recent price surge. In November, the exchange's XRP premium ranged from 3% to 13%. However, Upbit, which holds the largest XRP reserve, maintained a moderate premium level.
Meanwhile, asset manager WisdomTree filed an S-1 registration statement with the SEC for an XRP ETF on Monday after an initial registration in the state of Delaware last week. With the latest filings, XRP has joined. Bitwise, 21Shares and Canary Capital.
This follows rumors of the New York government approving Ripple's stablecoin trending across several investment subgroups on social media platform X, with many speculating on how it could fuel the current XRP bull run.
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However, market activity hasn’t been all green for XRP. Following the recent price surge over the weekend, XRP investors realized more than $2.7 billion in profits — the highest in the past eight years. This shows despite the recent whale accumulation, investors are increasingly booking profits as they ride the wave.
XRP Network Realized Profit/Loss | Santiment
The Mean Coin Age metric, which measures investors' accumulation/distribution activity, has been trending downwards across all age cohorts. This shows that selling activity has been constant among short-term and long-term investors in the past three weeks.
XRP Mean Coin Ages | Santiment
Additionally, Ripple unlocked 500 million XRP tokens worth over $1.35 billion on Sunday as part of its escrow unlock system. If this supply enters the market immediately, the current bullish momentum will slow down.
XRP bulls could target a new all-time high at $3.57Ripple's XRP smashed the $2.58 resistance on Monday, sparking liquidations of more than $91 million in the past 24 hours, per Coinglass data. Liquidated long and short positions accounted for $38.67 million and $52.47 million, respectively.
XRP/USDT weekly chart
If XRP maintains the uptrend above the $2.58 level, it could rally as high as $3.57 to complete the maximum profit target of a rounded bottom pattern. The remittance-based token validated the pattern after rallying above the $1.96 level last week.
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The bullish momentum is strengthened by XRP futures open interest (OI) surge to a new all-time high of $4.24 billion on Monday.
Open interest is the total amount of outstanding contracts in a derivatives market. An increase in OI during a price uptrend signifies new money is coming into the market in support of the bullish momentum.
XRP Open Interest | Coinglass
The Relative Strength Index (RSI) has remained at elevated levels in the oversold region in the past week, indicating a correction is imminent due to overheated prices.
A weekly candlestick close below $1.96 will invalidate the bullish thesis.
It depends on the transaction, according to a court ruling released on July 14, 2023: For institutional investors or over-the-counter sales, XRP is a security. For retail investors who bought the token via programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.
The United States Securities & Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token. While the judge ruled that programmatic sales aren’t considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this last case, Ripple did breach the US securities law and had to pay a $125 million civil fine.
The ruling offers a partial win for both Ripple and the SEC, depending on what one looks at. Ripple gets a big win over the fact that programmatic sales aren’t considered securities, and this could bode well for the broader crypto sector as most of the assets eyed by the SEC’s crackdown are handled by decentralized entities that sold their tokens mostly to retail investors via exchange platforms, experts say. Still, the ruling doesn’t help much to answer the key question of what makes a digital asset a security, so it isn’t clear yet if this lawsuit will set precedent for other open cases that affect dozens of digital assets. Topics such as which is the right degree of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales persist.
The SEC has stepped up its enforcement actions toward the blockchain and digital assets industry, filing charges against platforms such as Coinbase or Binance for allegedly violating the US Securities law. The SEC claims that the majority of crypto assets are securities and thus subject to strict regulation. While defendants can use parts of Ripple’s ruling in their favor, the SEC can also find reasons in it to keep its current strategy of regulation by enforcement.
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