Bitcoin enters volatile phase, with $100K still in sight as XRP surges

After rocketing to new heights last week, Bitcoin's (BTC) price momentum has entered choppy waters. At the time of writing on 27 November, the original cryptocurrency was trading at around $96,000, having just bounced back from a dip down to $93,000. The recent price correction has primarily been driven by profit-taking among newer holders, macroeconomic headwinds, and broader risk-off sentiment.

In contrast, Ripple (XRP) has surged, outperforming the broader crypto market due to strategic partnerships, record-high open interest, and bullish technical setups. Despite Bitcoin's short-term challenges, analysts remain optimistic about its $100,000 target, while XRP's rally showcases a starkly different trajectory within the crypto landscape.

Bitcoin price correction: key factors

Bitcoin's recent upward trajectory is facing some headwinds as it tries to break the critical psychological milestone of $100,000. Here's what's happening in BTC price action right now:

1. Profit-taking among new Bitcoin holders

Bitcoin has seen significant profit-taking, with Glassnode reporting over $2 billion in realised profits in a single day during the coin's surge toward $100,000. This selling pressure largely stems from holders of coins aged 6 to 12 months, while long-term holders — those with coins over a year old — are showing resilience, potentially waiting for higher price levels before selling.

2. Spot Bitcoin ETF sensitivity

New US spot Bitcoin ETFs have seen net outflows of over $550 million in recent days, reflecting the sensitivity of institutional investors to Bitcoin's price fluctuations. Similarly, Bitcoin-related equities like MicroStrategy have faced steep declines, though the company continues to add BTC to its reserves, signalling confidence in the long-term outlook.

3. Macro risks impacting Bitcoin

The strength of the Japanese yen, driven by speculation of a Bank of Japan (BOJ) rate hike in December, has renewed risk-off sentiment. The AUD/JPY pair — a traditional risk barometer — has turned lower, signalling potential caution for risk assets like Bitcoin. If yen-led risk aversion intensifies, Bitcoin could face further downside, potentially dropping below $90,000.

$100K Bitcoin still in sight

Despite the correction at the beginning of the week, Bitcoin continues to claw back lost ground, taking back $96,000 on Wednesday, a critical level for maintaining upward momentum. This recovery coincides with renewed buyer activity following the release of key US macroeconomic indicators, including jobless claims and the Personal Consumption Expenditures (PCE) Index, the Federal Reserve's preferred inflation gauge.

The economic data largely aligned with expectations, boosting market sentiment about a potential Federal Reserve interest rate cut in December. CME Group's FedWatch Tool placed the likelihood of a 0.25% rate reduction at 66%.

Bitcoin's climb back toward $95,000 has reignited discussions about a six-figure valuation bolstered by improving macroeconomic sentiment and bullish technical signals. While resistance and sell pressure near $100,000 may pose a challenge, market dynamics suggest strong support levels and renewed interest from buyers.

As Bitcoin continues its volatile journey, traders and investors are eyeing the next big move, with many positioning themselves for a potential breakout to new all-time highs. Meanwhile, in the world of altcoins, one particular contender has seen gains that significantly outpace the wider crypto market.

XRP surges amid Bitcoin's correction

XRP traders have had plenty to smile about this week as the popular altcoin made significant gains. But can the Ripple rally be sustained? Here are the current factors behind Ripple's recent rise:

1. New partnerships driving XRP growth

XRP has gained over 10% in the past 24 hours, reaching $1.48, with weekly and monthly gains of 30% and 179%, respectively. Ripple's partnerships, such as its collaboration with external organisations to tokenise money market funds and its planned investments in Bitcoin ETFs, have significantly boosted XRP's adoption prospects. Ripple Lab's current strategy appears to align the company (and, by extension, the XRP token) with the rapidly growing tokenised finance market, projected to reach $16 trillion in assets by 2030.

2. Open interest hits record highs

Open interest in XRP-tracked futures has surged to $2.06 billion, reflecting strong market sentiment and increasing capital inflows. This heightened activity, coupled with XRP's 7.2% price growth over the last 24 hours as of writing on 27 November, indicates bullish momentum supported by institutional interest and regulatory optimism.

3. Technical patterns signal further gains

Chart analysis shows XRP forming a bull flag, a pattern indicating potential continuation of its uptrend. If XRP price sustains its momentum, it could climb toward $4.28, representing a parabolic rally to new all-time highs. However, its overbought relative strength index (RSI) suggests the possibility of a pullback before further advances.

Is XRP overbought?

XRP faces potential short-term downside risks due to overbought conditions, as indicated by its high RSI levels. Historical trends and Fibonacci retracement levels suggest a possible correction to $1 or even $0.85 by December, particularly as whale investors reduce holdings. However, XRP remains in a long-term uptrend after breaking out of a seven-year symmetrical triangle pattern, with bullish projections targeting $3.41 or even $13.93 if the fractal behaviour holds. Fundamentals, including Ripple's partnerships and a potential regulatory resolution under the next US presidential administration, support the case for continued bullish momentum despite short-term volatility.

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