Since Donald Trump won the election and SEC Chairman Gary Gensler resigned, XRP has risen over 250% this year.
The SEC's appeal against Ripple and the potential launch of the XRP ETF will be key factors determining XRP's performance in 2025.
From a technical perspective, if the bullish sentiment in the cryptocurrency market continues into 2025, XRP could break through its historical high and reach around $4.75.
For the first 10 months of 2024, XRP has been in sideways consolidation (this pattern can actually be traced back to the major drop in May 2021). Although Judge Analisa Torres made a favorable ruling for XRP in August, helping it achieve a significant victory in the lawsuit against the SEC, the price didn't start to rebound until November.
However, with the victory of cryptocurrency-friendly candidate Trump in the presidential election and the resignation of SEC Chairman Gensler, XRP has finally broken free from more than three years of sideways consolidation.
From November to December, XRP's price increased by over 450%, peaking at $2.90 on December 3, becoming one of the top-performing cryptocurrencies. This surge brought XRP's market capitalization past $150 billion, surpassing USDT, Solana, BNB, and Dogecoin, rising to become the third-largest cryptocurrency.
What's new with Ripple? RLUSD Stablecoin
Ripple made a significant new advancement in 2024, announcing the development of a stablecoin named RLUSD. RLUSD is a product Ripple launched to compete with existing mainstream stablecoins like Tether (USDT) and Circle (USDC). This news was first revealed in April 2024, and Ripple positioned RLUSD as a U.S. dollar-denominated stablecoin aimed at competing with these established stablecoins.
The goal of RLUSD is to maintain a 1:1 peg with the U.S. dollar, backed by U.S. dollar deposits, short-term government bonds, and other cash equivalents to ensure that the stablecoin's value equals that of the U.S. dollar.
To ensure the liquidity of RLUSD, Ripple is collaborating with several major exchanges, including Uphold and Bitstamp. These partners will support the launch of RLUSD and ensure sufficient liquidity in the market.
On December 10, 2024, Ripple obtained approval from the New York Department of Financial Services (NYDFS) for the launch of RLUSD, marking the imminent official arrival of the stablecoin.
Ultimately, RLUSD went live on December 17 and quickly joined Tether and Circle, becoming an important player in the stablecoin market.
Regarding predictions for XRP in 2025, industry experts have provided varying views:
Eneko Knörr, co-founder and CEO of Stabolut, believes that XRP's massive market capitalization and growing institutional interest will lead to the approval of the XRP ETF in 2025. He is confident that Ripple will be one of the biggest beneficiaries under the upcoming pro-cryptocurrency Trump administration. He also mentioned that RLUSD (the stablecoin launched by Ripple) has a great chance of success, especially in this pro-cryptocurrency policy environment. 'It is widely speculated that Ripple, headquartered in the U.S., could be one of the main beneficiaries of this potential pro-cryptocurrency stance,' Knörr said in an interview with FXStreet.
Darren Franceschini, co-founder of Fideum, holds a similarly optimistic view. He believes that once the dust settles on the U.S. Securities and Exchange Commission (SEC) appeal regarding the Ripple case, the XRP ETF is expected to launch by mid-2025. 'The approval of the ETF could attract a large number of institutional investors and drive the XRP price to new heights. Some experts have even speculated that the price of XRP could soar to $35 next year.'
Ryan Lee, Chief Analyst at Bitget Research, also holds a positive outlook on XRP. He believes that the launch of RLUSD will help solidify XRP's position in the broader financial ecosystem, enhancing its utility and liquidity. 'The stablecoin on the XRP ledger can further enhance XRP's utility and liquidity.' However, Lee cautions that despite the bullish market sentiment, the performance of Bitcoin and the overall trends in the cryptocurrency market remain important factors influencing XRP's price trajectory in 2025.
However, James Davies, CEO of CVEX, questioned Ripple's RLUSD. He believes that Ripple lacks transparency regarding the reserves of RLUSD, pointing out that 'Ripple needs to clearly state the assets they hold, similar to Circle, so we can truly understand the utility of RLUSD.'
Overall, despite differing views on XRP's outlook, the positive market sentiment and upcoming policy changes undoubtedly add a lot of anticipation for the future of XRP and its stablecoin RLUSD.
As we enter 2025, if XRP still fails to break through the current resistance, those investors may choose to take profits and invest in other altcoins. According to Fibonacci retracement levels, if this occurs, $2.84, $2.35, and $1.96 may become key support levels.
Total number of XRP holders
In 2024, the number of XRP holders increased by over 720,000, rising from 4.98 million in 2023 to 5.71 million. Notably, more than half of these new holders joined in the last quarter of last year, especially after the surge in XRP's price in November. If XRP can continue to add new holders at this pace in 2025, the buying pressure from these new investors could drive the price further up.
XRP MVRV Ratio and 365-Day MVRV Ratio
The MVRV ratio is used to measure the average profit or loss of XRP investors, calculated by comparing market value and realized value.
Currently, XRP's MVRV ratio indicates that the average return on investment for all investors has reached 358%. However, this figure is still below the peak of 430% recorded during the bull market in 2021.
Regarding the 365-day MVRV ratio, it reflects the average return for investors who purchased XRP in the past year, currently at 112%. When this ratio approaches 100%, XRP typically experiences a pullback.
The MVRV long-short differential reached a peak of 65% at the height of the bull cycle. Although this figure is still below previous bull market levels, it also reflects optimistic market sentiment.
As we enter 2025, a cautious approach may be more advantageous, given that investors have already realized substantial gains. Although XRP may benefit from potential resolutions in its battle with the SEC and the launch and support of the RLUSD stablecoin, as well as positive factors like a pro-cryptocurrency Trump administration, if fear, uncertainty, and doubt (FUD) arise in the market, investors may panic and trigger significant profit-taking, potentially leading to a sharp drop in XRP's price.
XRP Open Interest and Financing Rate
Open Interest (OI) refers to the total amount of contracts in the derivatives market that have not yet been settled. The financing rate is a periodic payment between long and short traders, aimed at keeping the price of perpetual futures close to the spot market price.
XRP's Open Interest (OI) reached a historical high of $4.29 billion on December 3, but by December 17, this figure had fallen to $3.72 billion, a 400% increase compared to $720 million OI in 2023. This indicates that XRP has attracted significant investor interest in the derivatives market.
Meanwhile, XRP's funding rates have adjusted after soaring to significant highs, dropping from 0.096% on December 3 to 0.011% on December 17. This change indicates that although prices remain on an upward trend, funding rates have returned to normal levels, suggesting that the derivatives market for XRP is not overly speculative, leaving room for potential price increases for this remittance-based token as 2025 approaches.
In addition, the entire cryptocurrency market is showing a similar funding rate pattern, indicating that the current derivatives market is under less pressure and is unlikely to face significant pullbacks in the short term.
XRP 2025 Technical Analysis: Bullish Bias Persists, but Overbought Condition Poses Risks
XRP broke through the key resistance level of $1.96 in November, breaking years of consolidation. Based on the measured height from this low point to the breakout level, XRP may rebound to around $3.64 in the coming weeks, setting a new all-time high.
However, XRP may also encounter selling pressure as it approaches the historical resistance level of $3.55.
As we enter 2025, if XRP still fails to break through the current resistance, those investors may choose to take profits and shift their investments to other altcoins. According to Fibonacci retracement levels, if this happens, $2.84, $2.35, and $1.96 may become key support levels.
However, if XRP's ETF is indeed approved, it could extend the bull market into 2025.
Currently, the momentum indicators of the Relative Strength Index (RSI) and Stochastic (Stoch) have been in the overbought zone for more than a month, reaching the highest level since 2017, indicating that prices may need to adjust.
If the RSI and Stoch indicators fall below the overbought zone and return to neutral levels, XRP may experience a significant correction, possibly entering a longer downtrend.
Nonetheless, XRP recently broke through the resistance of the upper channel, validating the bullish flag pattern, and the daily chart appears more bullish.
If XRP can maintain the current upper boundary channel line as support, it may rebound to the level of $4.75, which is based on the calculated height of the flagpole from the breakout point.
If the weekly candlestick closes below $1.96, the bullish outlook will be invalidated.
Summary:
Like Bitcoin, XRP has performed well this year, with a 400% increase, making it one of the most talked-about cryptocurrencies in the last two months. The market is optimistic about the resolution of the SEC's case against Ripple, the adoption of the RLUSD stablecoin, and the potential launch of the XRP ETF, thus this remittance-based token is expected to encounter more opportunities in 2025.
In the first quarter of 2025, XRP may potentially break through the historical high of $3.55, and bullish investors will continue to pay attention to key resistance levels. However, if the bullish sentiment in the overall cryptocurrency market begins to weaken, XRP could also turn bearish.