XRP price rises before the launch of RLUSD, but a reversal may occur

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XRP price continues to rise, becoming one of the best-performing large cryptocurrencies in the market.

Ripple's XRP surged over 12%, extending the upward trend since the token hit a low of $1.9065 on December 10.

Previously, Ripple CEO Brad Garlinghouse announced that the company will launch the RLUSD stablecoin on December 17. The stablecoin will first be listed on major exchanges such as Uphold, Bitstamp, and MoonPay.

After months of regulatory scrutiny, Ripple developers have received approval from New York authorities. Ripple Labs aims to make RLUSD an important player in the stablecoin industry by providing enterprise-grade solutions.

However, RLUSD still faces significant risks in the future. The biggest risk is that it may ultimately fail to gain user favor. In the past, some stablecoins launched by major companies have not gained popularity.

For example, Justin Sun's stablecoin USDD has maintained a market cap of around $740 million since its launch in 2022. Similarly, PayPal's PayPal USD, launched in 2023, has struggled, currently holding an asset size of $458 million.

On the other hand, Tether (USDT) continues to grow its market share, with a market cap exceeding $140 billion. It has become the most widely used stablecoin in the industry, holding over 66% market share.

XRP price chart shows potential risks

Another potential risk for Ripple's price is that users may sell on news. This situation occurs when users buy assets in anticipation of significant events and then sell when the events occur. A good example is what happened after the last Bitcoin (BTC) halving in April. Bitcoin rose before the halving and then fell after the halving occurred.

Another technical risk for XRP is the formation of a double top pattern at $2.90. A double top is a bearish chart pattern that typically precedes a price pullback. In this case, XRP may reach $2.90 and then retrace to the $1.90 neckline.

Conversely, a breakout above the $2.90 double top resistance would invalidate the bearish outlook and could push XRP up to the $5 level.

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