RIP altseason? XRP price tumbles 13% despite Bitcoin’s $100K surge
2024.12.05 04:32
XRP (XRP) is down 13% in the last 24 hours to trade at $2.30 on Dec. 5., going in the opposite direction with Bitcoin (BTC), which has finally smashed through the $100,000 level.
The decline is part of a correction that started on Dec. 3 that has seen XRP price lose 25% of its value since reaching a multi-year high of $2.90.
XRP/USD daily chart. Source: Cointelegraph/TradingView
This drawdown has seen XRP’s market capitalization drop by 8% over the same period to $133 billion, slipping below Tether USD (USDt) to fourth place.
Let’s look closer at the factors behind XRP’s ongoing sell-off.
XRP wipes out all December gains against Bitcoin
XRP has outperformed Bitcoin since November, rallying approximately 354% between Nov. 1 and Dec. 5 compared to BTC’s 45.5% uptick over the same period.
XRP/USD vs. BTC/USD daily chart. Source: Cointelegraph/TradingView
As a result, XRP has trended higher against Bitcoin in November, reaching a 3.5-year high of 0.00003012 on Dec. 3, buoyed by high network activity and a generally positive market sentiment.
This ratio has since dropped to 0.00002334 on Dec. 5, wiping out all the gains made between Dec. 1 and Dec. 3.
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Interestingly, this happened as Bitcoin price smashed through the much-anticipated $100,000 mark to set a new all-time high of around $104,000.
XRP/BTC daily chart. Source: Cointelegraph/TradingView
At the same time, more than $12.79 million long XRP positions have been liquidated on Dec. 5, compared to $7 million short liquidations, as per data from CoinGlass. This likely contributed to the downward pressure on price.
XRP liquidations across all exchanges. Source: CoinGlass
The wipeout of long positions coincides with a drop in XRP’s futures’ open interest (OI), down from $4.3 billion a day ago. However, the OI remains high compared to the $722 million seen at the beginning of November.
Meanwhile, XRP’s 8-hour funding rate has jumped from 0.0163% to 0.0553% over the past day, suggesting that traders could again be getting bullish on altcoins such as XRP.
Bull flag suggests XRP’s upside is not over
From a technical perspective, the XRP’s price action has led to the formation of a bull flag pattern in the four-hour timeframe, as shown below.
A bull flag is a bullish continuation setup that forms after the price consolidates inside a down-sloping range following a sharp price ascent.
The pattern will resolve after the price produces a decisive close above the upper trendline of the flag at $2.37 and rises by as much as the previous uptrend’s height.
This puts the upper target for XRP price at $4.83, a new all-time high.
XRP/USD daily chart. Source: Cointelegraph/TradingView
Conversely, XRP’s relative strength index (RSI) has dropped from overbought conditions at 82 to 52 between Dec. 3 and Dec. 5. If the RSI maintains this downward trajectory, it would increase the chances of a deeper pullback.
Therefore, a retreat from $2.37 could see a retest of the flag’s lower trendline at around $2.05, embraced by the 50-period simple moving average (SMA). Lower than that, the price risks testing support at the 100 SMA around $1.68.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
