XRP is in an upward trend, with cryptocurrency trading prices reaching their highest levels in about seven years while maintaining substantial capital inflows.
To visualize this momentum, in the past 24 hours, XRP's inflow was approximately $26 billion, and as of the time of writing, its market capitalization reached $133 billion.
This influx of funds has made XRP the third largest cryptocurrency by market capitalization globally.
As for the price trend, at the time of writing, the asset's value was $2.33, reflecting a 20% increase in the past 24 hours. In the past week, Ripple-related cryptocurrencies soared more than 50%, with a rise of over 270% in the past month.
Invest in XRP
After years of consolidation, XRP seems to have established a robust upward trajectory, leading to the question: Is it too late to invest in this asset?
At the current valuation, XRP appears relatively cheap and shows potential for further growth. Now, a cryptocurrency trading expert using the alias Mags provided insights on whether to invest in XRP in a post on December 2.
According to analysts, XRP's trading price is significantly higher than its recent accumulation phase of $0.35. Thus, it may not offer the same risk-reward ratio as before.
Although there is still potential for further increases, experts point out that the most profitable opportunities usually arise during periods of low volatility and sideways price movements.
To this end, he revealed that after the recent surge in XRP prices, he plans to close out 75% of his XRP holdings and invest in projects that have not experienced similar surges and have higher upside potential.
Despite having taken some profits, the trader remains optimistic about XRP, predicting a potential target price of $4 during this market cycle.
Analysts indicate that XRP is currently in a parabolic phase, recommending that investors wait for the asset to re-enter the accumulation phase before purchasing.
He believes that XRP goes through four stages: explosive peak, initial pullback, accumulation, and parabolic phase. He emphasized that the first three stages offer ideal investment opportunities.
Drivers of XRP's increase
The recovery of XRP was influenced by Donald Trump's election victory and Gary Gensler's announcement of stepping down as chairman of the U.S. Securities and Exchange Commission (SEC).
This increase coincided with reports that New York's Department of Financial Services may approve Ripple's RLUSD stablecoin, expected to launch on December 4.
Moreover, speculation surrounding XRP exchange-traded funds (ETFs) has also driven the asset's increase. If such products are approved, it could push XRP to new highs.
Currently, XRP's target is the $3 mark, with technical indicators supporting this potential trend. For instance, the cryptocurrency's trading price is far above its 50-day ($0.82) and 200-day ($0.62) moving averages (MA), reflecting a strong upward trend.
However, the Relative Strength Index (RSI) is at 92.51, indicating that the market is in an extremely overbought state, suggesting that a correction may occur in the future.