XRP recorded a massive 42% gain in the past week, hitting a new all-time high of $3.40. Trading at $3.26 as of now, the altcoin has outpaced Ethereum in 24-hour trade volumes and continues its bullish streak. The rally is driven by several factors, including a crypto-friendly regulatory outlook, RippleNet‘s growing institutional adoption, and positive sentiment surrounding the U.S. administration’s potential pro-crypto stance.

XRP/USDT daily price chart

Regulation and Ripple Lawsuit: Key Catalysts

The inauguration of President-elect Donald Trump has sparked optimism in the crypto market, with expectations of supportive regulations under his administration. Additionally, Ripple’s partial legal victory against the SEC in July 2023, where Judge Analisa Torres ruled secondary XRP sales as non-securities, continues to bolster investor confidence.

Despite the SEC filing an appeal on January 15 to challenge this ruling, XRP’s price remains unaffected. Analysts, like Bitget Research’s Ryan Lee, note that regulatory clarity and potential institutional inflows could further strengthen XRP’s position in the crypto market.

On-Chain Metrics Signal Further Gains

XRP on-chain analysis | Source: Santiment 

XRP’s on-chain data supports a bullish outlook. The total funding rate has consistently stayed positive in January, and active addresses spiked significantly on January 16. Supply distribution metrics reveal increased holdings among wallets owning 10,000 to 100,000, 1 million to 10 million, and over 100 million tokens, suggesting strong accumulation even as prices rise.

Technical Analysis and Price Forecast

XRP’s technical indicators favour further growth. The MACD flashes green, indicating bullish momentum, while the RSI at 83 suggests overbought conditions. A 22% rally could push XRP into price discovery, targeting the 141.4% Fibonacci retracement level at $4.16.

In case of a correction, key support lies at the 50% Fibonacci retracement level, around $2.70. Analysts warn of potential volatility, urging traders to approach cautiously.

Expert Opinions: Optimism with Caution

James Toledano, COO at Unity Wallet, highlights the growing investor optimism surrounding XRP, driven by regulatory clarity and potential approval of an XRP ETF. He notes that institutional inflows from such an ETF could unlock new heights for the altcoin in 2025.

However, Toledano advises caution, emphasizing that altcoins often experience extreme price swings. He states:
“Altcoin ETFs hold great promise but could remain less consistent than Bitcoin ETFs due to the episodic nature of interest in altcoins. Factors driving these markets, such as seasonality, geopolitics, and macroeconomics, are complex and interconnected.”

XRP’s latest rally showcases its resilience amidst regulatory challenges and market fluctuations. While favourable developments could push prices higher, the volatile nature of the crypto market requires prudent decision-making from investors. With potential catalysts like an XRP ETF and supportive policies on the horizon, XRP’s future looks promising, albeit with risks.

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