Here’s why XRP price surged and 3 reasons it may crash soon

Ripple Price Skyrockets in November

Ripple's (XRP) value surged to an impressive $2.50, representing a staggering 400% increase from its monthly low. This rally elevated its market capitalization beyond $130 billion, surpassing that of popular coins such as Solana (SOL), BNB, and Dogecoin (DOGE).

Driving Forces Behind XRP's Rally

The primary catalyst for XRP's ascent was Donald Trump's election victory, which is anticipated to usher in more favorable cryptocurrency regulations. This development holds significance because Ripple Labs has been engaged in a protracted legal battle with the Securities and Exchange Commission since 2020.

The election also increased speculation about the possibility of a spot XRP exchange-traded fund by 2025. Asset manager WisdomTree, which manages assets worth $111 billion, recently filed for a spot Ripple ETF.

Influence of Whale Activity

Crypto analysts attribute XRP's recent surge primarily to whale activity, which triggered a fear of missing out (FOMO) among retail investors. CryptoQuant CEO Ki Young Ju noted that Coinbase whales played a substantial role, with exchange premiums rising to 3%-13%.

Increase in Non-Empty Wallets

Santiment, an analytics firm, reported a significant increase in wallets holding between 1 million and 10 million XRP, with an addition of 671 million coins in three weeks. This marked the first increase in non-empty wallets in eight years, driven by FOMO.

Potential Mean Reversion

Despite its surge, Ripple's price faces a potential pullback. The coin trades well above its short- and long-term moving averages, suggesting the possibility of mean reversion. Additionally, indicators such as the Relative Strength Index and Stochastic Oscillator indicate overbought conditions.

XRP's price could retreat to retest support at $1.9697, a key level last observed in April 2021.