Following one of the most notable cryptocurrency market surges of 2024 that excluded meme coins, XRP has recently experienced a sharp decline on its daily chart. Currently trading at $2.37, the digital asset has decreased significantly by 7.56% over the past 24 hours.
The extent of this decline is more pronounced when considering that XRP was valued at $2.82 on December 3—just two days prior—indicating a total drop of 16% from that peak.
Nonetheless, this sudden decrease is perhaps not unexpected, as the previous rally pushed the cryptocurrency’s relative strength index (RSI) above 70, indicating that it was considerably overbought.
Such a situation made the token vulnerable to various potential disruptions, and in the past two days, XRP has confronted two significant events.
What Led to XRP’s Major Correction
Initially, the drop following the highs on November 3 was triggered by the unexpected announcement from South Korea’s president of martial law and efforts to dissolve parliament, a move currently being investigated for potential treason.
However, the downturn observed on Wednesday was as short-lived as the intense political turmoil in the East Asian nation.
More recently, XRP may also have been affected by speculation regarding the imminent launch of Ripple’s stablecoin, RLUSD, fueled by comments from notable figures like Tron founder Justin Sun.
Yet, Ripple’s own announcement on X—clarifying that the stablecoin has not yet received official approval—served as a significant blow to the XRP rally.
Upon examining the 24-hour chart along with the timing of the announcement revealing that RLUSD is not launching on December 4, it seems the news played a more significant role in halting recovery than contributing to the decline.
Ultimately, XRP’s ongoing downturn is likely attributable to a broader range of factors, particularly as technical analysis (TA) conducted earlier on Wednesday, reported by Finbold, strongly suggested a major correction was imminent.
Speculation may also have been amplified by the belief that the token’s price increase was ‘unnatural,’ giving rise to the notion of a ‘pump and dump’ scenario gaining momentum on December 4.
Is There a Chance for Ripple to Recover in December?
Despite the bleak outlook suggested by the decline on December 5, it is essential to note that XRP remains an impressive 62.36% up over the past week and 376.52% higher over the last 30 days.
The token could soon benefit from positive external news. Just as part of XRP’s prior price surge was spurred by the announcement that Securities and Exchange Commission (SEC) Chair Gary Gensler would resign on January 20, a similar boost could arise from Donald Trump’s nomination of cryptocurrency lobbyist Paul Atkins as his successor.
This scenario appears particularly feasible considering that Bitcoin (BTC) likely caused a significant redirection of funds away from altcoins upon surpassing the anticipated $100,000 mark; this trend could reverse if BTC experiences a major correction or pauses before making further gains.
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