Ripple's XRP may see a rebound after recent pullback; on-chain data suggests further upward potential
- Ripple's XRP funding rate isn't very high compared to previous bullish seasons despite a 400% rise in the past month.
- RLUSD will not debut yet despite rumors of an alleged launch on Wednesday.
- XRP struggles to reclaim $2.58 amid a quest for a new all-time high at $3.57.
XRP traded near $2.4 on Wednesday as Ripple Labs clarified that its RLUSD stablecoin will not debut on exchanges despite a rumored launch among crypto community members. Amid a sharp decline in XRP's price, on-chain data shows the remittance-based token still has the potential to resume its rally.
XRP could resume rally as attention turns to RLUSD launch
XRP witnessed double-digit losses on Wednesday, declining 11% despite its 400% gains in the past month. The asset has been among the top trending altcoins, leading the charge for the much-anticipated alt season.
Despite the massive rise, XRP's funding rate remains somewhat stable compared to levels seen during its rally in February 2024 and the March 2021 bull market, according to Coinalyze data.
XRP Funding Rates | Coinalyze
A stable funding rate indicates that the market isn't overly bullish, and there's potential for further price growth, reducing the risk of overheating.
Likewise, XRP's weighted sentiment is also at low levels compared to previous rallies. This indicates that retail traders may not be the primary factor behind the asset's recent strong uptrend.
When retailers are not the major factor behind a price rally, it reduces the potential for panic FUD selling during market downturns.
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XRP Weighted Sentiment | Santiment
As traders and investors anticipate a rebound in XRP's price, attention has also turned to the upcoming launch of the RLUSD stablecoin.
RLUSD is Ripple's stablecoin pegged to the US dollar and aims to provide users with a more stable transaction asset. Major exchanges like Coinbase are already lining up to begin issuing RLUSD to customers for trade.
While most crypto community members anticipated the launch of RLUSD on Wednesday, Ripple clarified that the launch isn't happening yet as key details are being finalized with the New York State Department of Financial Services.
Despite some speculation, $RLUSD isn’t launching today. We’re in lockstep with the NYDFS on final approval and will share updates as soon as possible.
— Ripple (@Ripple) December 4, 2024
We are fully committed to launching under the supervision of NYDFS and upholding the highest regulatory standards. Stay tuned…
XRP faces sell pressure near $2.58 amid quest for new all-time high at $3.57
XRP declined 11%, sparking over $34 million in liquidations in the past 24 hours, per Coinglass data. Liquidations included $25.37 million from long positions and $8.75 million from short positions.
XRP has struggled to reclaim the $2.58 level after declining below it on December 3, meaning sellers are defending the level.
XRP/USDT 4-hour chart
If the decline continues, it could find support at $1.96 near the 50-day Simple Moving Average (SMA).
However, if XRP sustains a high volume move above $2.58, it could rally to the upper boundary of a key rectangle channel at $3.57 to set a new all-time high.
The Relative Strength Index (RSI) momentum indicator is trending downward and testing its midline, signaling weakening bullish momentum.
A daily candlestick close below $1.96 will invalidate the thesis.
Cryptocurrency prices FAQs
Token launches influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.
A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.
Macroeconomic events like the US Federal Reserve’s decision on interest rates influence crypto assets mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.
Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs.
Author
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addi
