Ripple price rose for three consecutive days as Bitcoin and other altcoins rebounded on the first trading day of the year, hinting at a potential January Effect.
Ripple (XRP) climbed to $2.40 on Thursday, marking its highest level since Dec. 18 and a 26% increase from its lowest level last week.
There are a few reasons why the XRP price is soaring, and why the momentum may continue in the next few weeks. First, Donald Trump will be inaugurated this month, while Gary Gensler is expected to resign before that.
Trump has named Paul Atkins to be the next head of the Securities and Exchange Commission. Atkins, a veteran regulator, has shown support for the crypto industry, signaling a potential shift from the Gensler era. While these developments have already been priced in, Ripple and other cryptocurrencies could see further gains ahead of these events.
Further, odds that the SEC will approve a XRP ETF are rising. According to Polymarket, these odds have risen to 70%. Approval of a Ripple ETF could drive more purchases, mirroring the impact seen with Bitcoin (BTC) and Ethereum (ETH) ETFs, which have added $35 billion and $2.6 billion in assets, respectively.
XRP’s ecosystem is also showing signs of growth. Ripple USD (RLUSD), its stablecoin, has been added to multiple exchanges, including Bullish, Independent Reserve, and Uphold.
Furthermore, the XRP Ledger is expected to gain traction this year, potentially solidifying Ripple’s role in industries like Decentralized Finance and Real World Asset tokenization.
Ripple price is also benefiting from the January Effect, a situation where investors come back from holiday and buy assets.
XRP price has strong technicals
The XRP price surge is in line with what we predicted last week. In that analysis, it was suggested that the coin’s recent pullback was part of a mean reversion, a process where an asset returns to its historical averages after a significant rally. For XRP, this involved a drop toward its 50-day moving average.
Ripple has also formed a bullish pennant chart pattern, characterized by a long vertical line followed by a period of consolidation. This pattern often leads to a strong breakout, which appears to be underway.
As a result, XRP’s price is likely to continue rising, with the next target at $2.90, approximately 21% above the current level. Further gains could push the price toward resistance at $3, and potentially $5. Conversely, a decline below the 50-day moving average at $1.90 would invalidate this bullish outlook.
