Ripple price prediction: XRP/USD drops 8%, loses Top 3 spot to Tether
At the time of writing, XRP was trading above $2.40
After a triumphant surge in November, when XRP soared by 280%, followed by another 30% rise in December, Ripple's cryptocurrency is now showing a predictable correction, losing about 8% on December 9.
This pullback was expected, as last week saw a sharp decline in the volume of XRP being withdrawn from exchanges after the token began to reverse without reaching the $3 mark. This suggests that most potential long-term investors have already made their purchases, leaving the exchanges populated by those seeking to lock in short-term profits.
Nonetheless, Monday's XRP price drop allowed Tether to push Ripple down to fourth place in the cryptocurrency market capitalization rankings, reclaiming its spot in the top three. Furthermore, this downturn surprised XRP short traders, who reportedly lost $1.5 million on Monday, according to CoinGlass data.
Price dynamics of XRP/USD in November - December 2024. Source: TradingView.
At the time of writing, XRP was trading above $2.40, positioned between the 20-day and 50-day EMA on one side and the 100-day and 200-day EMA on the other. The Relative Strength Index (RSI 14) was hovering around 40, signaling continued selling pressure.
Potential scenarios
Under these circumstances, it’s natural to anticipate that further declines would lead XRP to test key support levels around the 100-day EMA at $2.33 and the early December price of $2.30. If these levels are breached, XRP could retest the $2.00 mark.
However, such a scenario seems unlikely. Ripple's cryptocurrency enjoys consistent demand. As a result, a further drop in the RSI would likely signal a buying opportunity, triggering a price reversal upward.
In this case, XRP could aim to return to its 20-day and 50-day exponential moving averages at $2.46 and $2.49, respectively, and test the critical psychological level of $2.50.
Following this, Ripple's cryptocurrency could strive to retest its November high of $2.90, targeting $3 or even the cycle high of $3.30 reached in 2021.
The impressive 300% growth of XRP over the past month, propelling it into the top three digital assets by market capitalization, has made Ripple’s token an attractive investment for smaller companies.
Market observers note a surge in institutional interest in XRP as businesses seek to diversify their treasury reserves amid the growing capitalization of the cryptocurrency market.
