XRP soars to seven-year high, reclaims third place in crypto market cap rankings

Ripple (XRP), the native cryptocurrency of the Ripple digital payment network, has experienced a remarkable surge, reaching a seven-year high of $2.70. This impressive rally has propelled XRP to become the third-largest cryptocurrency by market capitalisation, surpassing Solana (SOL) and Tether (USDT).

A historic comeback

After spending four years outside the top three cryptocurrencies, XRP has made a significant comeback. The digital asset had dropped in rankings following the US Securities and Exchange Commission's (SEC) lawsuit against the parent company Ripple in December 2020, which alleged that the company conducted an unregistered securities offering. This legal battle caused XRP's price to plummet from approximately $0.50 to $0.17, erasing over $15 billion in market value.

However, recent developments suggest that the lawsuit may be nearing a resolution, especially given Ripple's several legal victories in 2024. The anticipation of a favourable outcome has contributed to renewed investor confidence in XRP.

US election result, SEC leadership changes fuel crypto optimism for regulatory clarity

The 2024 US presidential election resulted in Donald Trump's victory, which has been viewed positively by the cryptocurrency community. Trump's pro-crypto stance, including promises to transform the United States into a global crypto hub and to dismiss SEC Chair Gary Gensler, has generated optimism about a more supportive regulatory environment for digital assets.

Rumours of meetings between Trump and Ripple CEO Brad Garlinghouse have circulated on social media, further boosting investor sentiment. Although these claims remain unverified, the mere possibility has contributed to XRP's price appreciation.

Industry leaders believe that the new administration may lead to the dismissal or settlement of ongoing SEC cases against crypto companies, including Ripple. Former Commodity Futures Trading Commission Chair Chris Giancarlo has publicly urged regulatory agencies to drop such cases, suggesting that doing so would save the industry significant resources and promote innovation.

Ripple's RLUSD stablecoin on the horizon

Adding to the excitement is the expected approval of Ripple's overcollateralised, dollar-pegged stablecoin, RLUSD, by the New York Department of Financial Services. Reports indicate that the regulator may grant approval soon, with a potential product launch as early as 4 December. Ripple plans to utilise RLUSD alongside XRP in its cross-border payment solutions, which could enhance the utility and adoption of both assets.

XRP overtakes major competitors

The recent price surge has allowed XRP to overtake both Solana and USDT in market capitalisation. With a market value exceeding $134 billion, XRP now trails only Bitcoin (BTC) and Ethereum (ETH). This achievement underscores the significant investor interest and confidence in XRP's future prospects.

Market dynamics and future outlook

The open interest in XRP-tracked futures has reached record highs, indicating increased capital flowing into the market. This metric suggests that traders are optimistic about the continuation of the uptrend. Technical analysis shows that bulls have established support levels around $2.30 and $1.45, with the next psychological barrier at $3.00. Breaking this level could pave the way towards XRP's all-time high of $3.80, set in January 2018.

However, traders should be cautious as the Relative Strength Index (RSI) indicates extremely overbought conditions, which could lead to a price correction. Potential support in the event of a downturn lies at the Fibonacci retracement levels of $2.00 and $1.80.

XRP's recent performance highlights a combination of favourable factors, including political developments, anticipated regulatory clarity, and new product launches. As the market continues to react to these events, XRP remains a cryptocurrency to watch closely. Investors are optimistic that the convergence of these elements could propel XRP to new heights, possibly surpassing its previous all-time high.

Is altcoin season upon us?

As the cryptocurrency market gears up for the festive season, speculation is growing about the arrival of an eagerly anticipated "altcoin season". However, the factors driving this trend appear to have shifted, suggesting a new paradigm for traders and investors.

The dynamics of the cryptocurrency market are evolving, with traditional indicators losing their predictive power. The classic notion of altcoin season, defined by capital flowing out of Bitcoin and into altcoins, may no longer apply. Instead, rising altcoin trading volumes against stablecoin and fiat currency pairs now serve as a more reliable signal.

Bitcoin pair trading volumes have remained subdued, even as major altcoins like ETH, XRP, and SOL approach record highs. This contrasts with earlier market cycles, where Bitcoin capital rotation was a hallmark of altcoin season.

Unlike previous bull markets, which were largely driven by retail investors, the current surge in Bitcoin's price appears to stem from institutional investments in spot Bitcoin exchange-traded funds (ETFs). This shift in capital dynamics has created a more stable but less retail-driven environment for altcoins.

The Blockchain Center's Altcoin Season Index suggests that an altcoin season is on the horizon. The index measures whether 75% of the top 50 cryptocurrencies have outperformed Bitcoin over the past 90 days. Currently, 73% of these altcoins have surpassed Bitcoin's performance, pushing the index closer to the 75% threshold.

With leading altcoins challenging new highs, market participants are advised to monitor stablecoin liquidity and Bitcoin's dominance index, both of which could signal the official start of an altcoin season in the coming days, creating opportunities for informed traders to thrive in this changing landscape.

As the festive season unfolds, it remains to be seen whether more altcoins will take cues from XRP's recent rally and go on to steal the spotlight from Bitcoin, but the signs are pointing toward a very merry altcoin season.

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