XRP Price Chases $2 After Bull Flag Breakout Leads to New 2024 Highs

XRP, the native cryptocurrency of the Ripple network, has made significant strides in 2024, surging to new year-to-date highs. After breaking out of a bullish bull flag pattern, XRP has moved closer to the $2 mark, fueled by growing partnerships and an increase in trading volumes. The altcoin, which is currently trading at $1.88, has rallied 40% this week alone and is quickly approaching its target of $2, with analysts predicting it could even flip Binance Coin (BNB) to become the fifth-largest cryptocurrency by market capitalization.

XRP's Rally: A New High for 2024

XRP's latest surge marks a new year-to-date high of $1.68, further solidifying the altcoin's strong bullish trend. The price has been following a higher high (HH) pattern, with each subsequent peak surpassing the previous one. This consistent upward movement has attracted attention from traders and investors, with many speculating that XRP could soon breach the $2 mark.

XRP’s price has seen an impressive 232% increase in the past 30 days, and its recent performance has helped it gain significant momentum. If this upward trend continues, XRP may be on track to challenge larger players in the market, including BNB, which currently holds the fifth spot in terms of market capitalization.

Surge in On-Chain Activity

Beyond price appreciation, XRP's on-chain metrics are also showing positive signs of growth. According to data from xrpscan, active accounts on the XRP network saw a substantial rise in November. The number of unique senders increased from 15,592 on Nov. 1 to as high as 47,044 on Nov. 16, reflecting a surge in network activity. The average number of active accounts more than doubled, rising from around 12,000 to 25,000 in November.

The increase in active accounts is accompanied by a rise in new account activations, suggesting an influx of new users joining the XRP ecosystem. This uptick in on-chain activity, combined with XRP’s impressive price gains, indicates a growing demand for the cryptocurrency.

Strategic Partnerships Fueling XRP’s Growth

Several strategic partnerships have also contributed to XRP's bullish momentum. Ripple’s collaboration with Archax to launch a tokenized money market fund on the XRP Ledger has bolstered investor confidence in the network’s future potential. Moreover, Bitwise, a prominent crypto index fund manager, announced on Nov. 7 that it would rebrand its European XRP Exchange Traded Product (ETP), offering European investors exposure to XRP through a physically backed product. These developments have further solidified XRP’s position as a key player in the cryptocurrency market.

Eyes on the $2 Mark: Will XRP Maintain Its Momentum?

XRP’s breakout from its bull flag pattern signals a continuation of the uptrend, with many analysts setting their sights on a price target between $1.95 and $2.05. This target range includes XRP’s previous bull-run market top of $1.97, which is expected to act as overhead resistance. Should XRP surpass this level, the next major hurdle will be the $2 mark, a psychological milestone for many traders and investors.

Independent crypto analyst Mikybull has expressed optimism about XRP’s potential, suggesting the cryptocurrency could experience a rally reminiscent of its 2017 price action. According to Mikybull, XRP may reach $2 before experiencing a brief pullback, only to resume its upward momentum and target a new cycle top, possibly as high as $10.

Overbought Conditions and Bearish Divergences

Despite the bullish outlook, there are signs that XRP could face a short-term pullback. The mid-term and long-term charts are showing clear bearish divergences, which suggest that the recent rally may be losing momentum. Additionally, trading volume and price action have exhibited an inverse correlation since Nov. 16, signaling that XRP may be entering a distribution phase.

In a distribution phase, traders who bought into XRP earlier may be looking to take profits, which could lead to a market reversal. The declining trading volumes over the past three days, which are the lowest since Nov. 10, support this hypothesis, as it suggests that interest in XRP may be waning. As a result, the probability of a bearish market reversal increases, and traders should remain cautious about the potential for a short-term correction.

Conclusion: A Promising Yet Cautious Outlook for XRP

XRP has shown impressive growth in recent weeks, breaking out to new 2024 highs and demonstrating strong on-chain activity. The cryptocurrency is approaching its $2 target, driven by strategic partnerships and a surge in active accounts. However, while the long-term outlook remains bullish, there are signs that XRP could face some resistance at the $2 mark, and the recent drop in trading volume raises concerns about a potential market reversal.

As XRP continues to build momentum, traders should keep an eye on both the technical indicators and market sentiment. While the path to $2 looks clear, caution is advised given the overbought conditions and potential for a short-term pullback.