XRP recently demonstrated impressive growth, causing the altcoin to surpass USDT, earning the title of the third-largest cryptocurrency in the world. With the altcoin's market capitalization reaching $154 billion, XRP now makes up half the value of Ethereum.
However, despite the bullish sentiment, the upward trend lacks sufficient strength, and the altcoin is approaching overbought conditions. If momentum strengthens, XRP may repeat the strong price dynamics observed in 2024.
Market signals for XRP have not yet gained strength.
The Relative Strength Index (RSI) for XRP currently stands at 69.23, slightly below the critical threshold of 70.0, which signals overbought conditions. Historically, when assets enter the overbought zone, a price reversal often occurs as momentum weakens. However, in November 2024, XRP broke the typical pattern, continuing its bullish rally despite reaching similar overbought conditions.
This creates a scenario where XRP may repeat history if momentum continues to rise. In November 2024, the price did not experience a reversal; instead, it sharply increased despite reaching the overbought zone. For XRP to replicate its success in 2024, the current bullish trend needs to gain more strength. The Average Directional Index (ADX) is currently slightly below the critical threshold of 25.0, which is important for confirming the strength of the upward trend. If the ADX for XRP crosses this threshold, it would signal that bullish momentum is gaining strength and could support the current rally.
In the past, when XRP experienced a similar situation in November 2024, the ADX also indicated that momentum was increasing. This strength allowed XRP to break through resistance and rise higher, even when the asset was considered overbought. Therefore, ADX could play a key role in determining whether XRP can repeat its previous success. The price of XRP could reach $3.
XRP is currently trading at a price of $2.58, having risen by 21% over the past week. The altcoin managed to break the resistance level at $2.56, but has not yet solidified it as support. If this level holds, XRP may continue its upward trend.
With the $3.00 mark within reach, XRP aims to overcome the next barrier at $2.95. If XRP manages to break this level, a move towards the $3.00 mark is possible, repeating the history of strong price movements observed earlier. However, without sufficient strength in the upward trend, XRP may return to overbought conditions, leading to a price reversal. In the event of a decline, XRP could face a drop below $2.56, which may result in a potential fall to $2.27. If this happens, it would nullify the current bullish thesis, signaling a possible end to the rally. The market's ability to maintain strength in the short term will be crucial in determining XRP's price trajectory.