Ripple pulls back, still up 100% YTD

XRP is seeing a technical pullback after surging over 11% yesterday (Monday, November 6th).

Although unable to stay around its highest since end-July, Ripple is still trading around a 3-month high at the time of writing.

This makes XRP a star performer among crypto majors so far in November, with a month-to-date gain of about 13.4% at the time of writing.

NOTE: The XRP was a token built for payments, operating on the XRP Ledger.

The world’s 5th largest crypto by market cap (according to Coin Gecko) may have more froth to clear.

Note that XRP’s 14-day relative strength index (RSI) is still above 70, which suggests that this token has been overbought.

According to Bloomberg data, historically, XRP has crossed this boundary 9 times so far this year. It then dropped by an average of 7.4% in the 20 days after each “overbought” episode.

Should prices moderate further and pull its 14-day Relative Strength Index (RSI) below the 70 mark which marks “overbought” conditions ...

that could set a stronger base for further price gains.

Why is XRP soaring?

Last week, Ripple said that XRP was approved under the Dubai Financial Services Authority’s virtual assets regime.

This means that entities operating in the Dubai International Financial Centre can incorporate and offer XRP to clients.

This positive development comes after Ripple received a digital token license from the Monetary Authority of Singapore a month ago.

Furthermore, the National Bank of Georgia are joining the governments in Hong Kong and Taiwan in using Ripple’s platform for their respective central bank digital currency projects.

Ripple’s gains may also be an extension of broadening risk appetite, with smaller cryptos outpacing the likes of Bitcoin.

• For reference, Bitcoin has risen by 0.6% so far this month, unable to yet build much on its October surge. Though to be clear, the world’s largest crypto is still up by 109% so far in 2023.
   
• Compare that 0.6% number above with the 14% climb so far in November for the 30 mid-tier tokens, featuring the likes of Stellar, OKB and FileCoin, on the MarketVector Digital Assets 100 index.
   
• Even other big boys such as Ethereum are playing catch up with Bitcoin, with the former posting a 3% gain so far this month.

Even interest rates to borrow stablecoins are soaring on DeFi lenders – a sign of increased willingness to take bigger risks within the crypto market.

Another exchange also recently reported an all-time high for liquidated shorts within a 24-hour span just this week.

Of course, all this risk-on activities could see a dramatic pullback if US Treasury yields surge once more or Fed officials again forcefully rein in liquidity across financial markets.

And as we know, liquidity is a cornerstone of the crypto markets.

In the interim, there could be more opportunities for traders amid these green shots of a recovery in the crypto sector.

Where to next for Ripple?

Ripple bulls (those who believe that prices will go up) will be looking to clear the 0.73200 region that had acted as stern resistance since late July.

If XRP can conquer this 0.73200 resistance zone, bulls will be eager to reclaim recent peaks at 0.85250 and 0.91871.

However, if Ripple is forced to relinquish much of its recent surge, prices may unwind and falter back towards its 50-day simple moving average (SMA) for support.