Fibonacci this, fractal that, RSI this, EMA that..... Crypto is not stock market, stop using same tools, it doesn't work. Try market sentiment, socials, you might get something.

XRP (XRP) has dropped by over 17% four days after reaching a multi-year high of around $1.63, trading at around $1.41 as of Nov. 27. On a month-to-date basis, however, the cryptocurrency is maintaining its “Trump Trade” profits, up by almost 180% in its best month since April 2021.

Overbought XRP signals 25% dump by December

XRP’ss relative strength index (RSI) levels has been above 70 on the daily chart throughout November, signaling potential exhaustion of its ongoing uptrend.

Historical data highlights XRP's tendency to correct sharply after reaching overbought RSI levels. For instance, in June 2023, XRP's daily RSI surpassed 85 during a rally to $0.82, after which the price dropped by 46.5% in less than two months, bottoming out at $0.43.

Similarly, following an RSI spike above 70 in November 2023, XRP fell by 33.6% over the next several weeks, retreating from $0.65 to $0.43.

XRP/USD daily price chart. Source: TradingView

Current price levels also align with Fibonacci retracement extensions. XRP's recent breakout surpassed the 2.618 Fibonacci extension near $1.09, now proving to be a strong resistance level, and raising XRP’s potential to drop toward the $1 level, which coincides with the 1.618 Fibonacci extension, by December.

If a correction occurs, the $1 psychological level could act as a short-term floor. A deeper pullback, however, may revisit the 50-day exponential moving average (EMA) near $0.85, aligning with previous Fibonacci support levels.

Interestingly, XRP’s correction coincides with a slight drop in the supply held by its richest investors, namely those holding over 100,00 tokens.

XRP supply in addresses with balance over 100,000 tokens. Source: Messari

A decline in whale holdings could indicate a shift from an accumulation phase to a distribution phase. Whales often accumulate tokens during periods of consolidation or low volatility. When prices spike, they distribute their holdings to retail buyers chasing the rally.

XRP long-term metrics hint at bullish momentum

Switching to weekly price chart shows XRP in a long-term uptrend stage after breaking out of its giant symmetrical triangle pattern.

Notably, XRP broke out of the triangle pattern in late October for the first time in seven years. This technical move resembles a similar breakout that preceded XRP’s historic 43,650% rally in 2017-2018.

XRP/USD six-week price performance. Source: TradingView

The current breakout also displays similar fractal behavior, with XRP reclaiming key levels at the 0.5 Fibonacci retracement (~$1.78) and now targeting higher extensions.

If the fractal holds true, XRP could attempt to retest its 2018 peak near $3.41, while a long-term projection could target the 4.236 level at $13.93.

Fundamentals support a prolonged bull run.

For instance, Donald Trump’s reelection could assist ending the long-running SEC versus Ripple battle. Additionaly, Ripple’s recent partnership with UK-based FCA-regulated digital asset exchange Archax to launch a tokenized money market fund on the XRP Ledger could further boost XRP adoption.

However, the 6-week RSI has climbed to 70, a threshold that historically precedes short-term corrections or periods of consolidation. A pullback to retest the triangle's upper trendline, now near $1.00, cannot be ruled out. The $1 target aligns with the daily chart analysis above.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.