Could Ripple's XRP resume rally after recent pullback? On-chain data suggests a positive tone
- 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.
Ripple FAQs
Ripple is a payments company that specializes in cross-border remittance. The company does this by leveraging blockchain technology. RippleNet is a network used for payments transfer created by Ripple Labs Inc. and is open to financial institutions worldwide. The company also leverages the XRP token.
XRP is the native token of the decentralized blockchain XRPLedger. The token is used by Ripple Labs to facilitate transactions on the XRPLedger, helping financial institutions transfer value in a borderless manner. XRP therefore facilitates trustless and instant payments on the XRPLedger chain, helping financial firms save on the cost of transacting worldwide.
XRPLedger is based on a distributed ledger technology and the blockchain using XRP to power transactions. The ledger is different from other blockchains as it has a built-in inflammatory protocol that helps fight spam and distributed denial-of-service (DDOS) attacks. The XRPL is maintained by a peer-to-peer network known as the global XRP Ledger community.
XRP uses the interledger standard. This is a blockchain protocol that aids payments across different networks. For instance, XRP’s blockchain can connect the ledgers of two or more banks. This effectively removes intermediaries and the need for centralization in the system. XRP acts as the native token of the XRPLedger blockchain engineered by Jed McCaleb, Arthur Britto and David Schwartz.
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