XRP Surges 15 Percentage in 24 Hours Amid Network Growth – Can the Rally Be Sustained?

XRP experienced a significant surge, climbing over 15% in just 24 hours, driven by a sharp increase in network activity. Despite this impressive rally, on-chain data suggests waning bullish sentiment, raising questions about the token's ability to maintain its upward momentum.

Record Network Growth Drives XRP Rally

According to data from Santiment, active wallet addresses for XRP surpassed 116,000, fueling the token's meteoric price rise. XRP's market cap reached a record high of $155.69 billion on December 3, accompanied by a remarkable 93.29% increase in trading volume within 24 hours.

This rally reflects heightened participation from retail investors rather than large-scale investors, as post-election momentum appears to favor smaller market participants.

Whales Hold Back, Restricting Rally Potential

Despite the surge, whale activity has shown signs of caution. Stablecoin holdings among whales dropped to 53.993% of the total supply, indicating hesitation among large investors to increase their exposure. This conservative approach by major players is beginning to cap the rally’s strength.

Additionally, technical indicators paint a mixed picture. The Moving Average Convergence Divergence (MACD) chart from TradingView recently signaled a bearish crossover, with the MACD line falling below the signal line. This shift, combined with downward-trending histograms, suggests potential short-term price declines.

Profit-to-Loss Ratio Indicates Market Hesitation

Another key metric, the profit-to-loss ratio, highlights cautious sentiment among traders. The daily ratio recently settled around 0.374, indicating that more investors are opting to sell rather than buy during the rally. Such hesitation could hinder XRP's ability to sustain upward price movements, especially in the face of bearish technical signals.

Challenges for Sustained Growth

XRP faces a tug-of-war between retail-driven momentum and institutional caution. At press time, the token is attempting to recover from minor pullbacks. Institutional interest, such as the recent filing for a spot XRP ETF by WisdomTree, could inject much-needed liquidity into the market if approved.

Ripple, meanwhile, issued a warning to users about scams amid the heightened activity surrounding XRP. The company emphasized that neither Ripple nor its executives would ever ask for XRP transfers, urging investors to stay vigilant.

"Uptick in the crypto market means uptick in scams — reminder that @Ripple will never ask you to send XRP, and neither will Brad, David, Monica, Stu, or anyone else from Ripple. Stay vigilant!" – Ripple, via Twitter

Outlook for XRP

The sustainability of XRP’s rally hinges on overcoming bearish on-chain metrics and maintaining network growth. While retail interest remains strong, institutional participation will likely be a deciding factor in determining whether XRP can extend its upward trajectory.

As the crypto market watches closely, XRP’s ability to maintain its gains amid cautious sentiment and potential regulatory developments will be pivotal in shaping its future performance.