It was a stellar week for Ripple (XRP), which surpassed all expectations and re-established the $1 mark – a milestone that XRP had not seen for more than three years. After a long period of consolidation, XRP has made a strong comeback, affirming its durability and resilience. However, the real challenge is just beginning.
A perfect combination of internal and external factors has created the momentum for this remarkable growth, not only pushing XRP past the $1 threshold but also helping it rise to sixth place, surpassing Dogecoin (DOGE). XRP’s market capitalization has also increased by more than 10%, reaching $60.45 billion.
However, the bulls will need to turn the $1 mark into a solid support zone.
XRP exchange reserves have been steadily increasing throughout the month, peaking five days ago at 3.273 billion tokens held, up 5.41% from the 3.105 billion tokens held in the first week of the month.
Notably, in the second week, as Bitcoin exploded past $90,000, leading to strong growth in many other altcoins, XRP prices remained stable. This trend is clearly reflected in the significant increase in XRP reserves on exchanges.
XRP Correction Signals
As top altcoins entered an overextended growth phase and profit-taking began to emerge, XRP saw a significant drop in its exchange reserves, falling to 3.228 billion tokens. This reflects a cautious sentiment from investors, as concerns that Bitcoin may soon enter a “high-risk” zone, prompting them to reduce their exposure to riskier assets.
Investors identified XRP as an ideal “exit point” five days ago, taking this opportunity to rebalance and diversify their portfolios, as most altcoins peaked.
Now, as exchange reserves are trending up again, it seems that these investors are turning to other assets to take advantage of the new growth.
However, this suggests that the $1 mark may be a short-term milestone, unless bulls can consolidate and turn it into solid support. Defending the $1 mark will be crucial in sustaining the bullish momentum.
If bulls succeed in holding this support level, attention will turn to whale activity, as this could open the door to a new rally towards the $1.15 target. However, XRP is facing significant challenges, including increased selling pressure, an overbought RSI, and stiff competition from outperforming memecoins. If the $1 hold strategy fails, XRP risks falling back to its base price zone, posing a major risk to the current recovery trend.
