This past week was an extremely bullish one for Ripple [XRP] as it exceeded expectations and climbed back towards the $1 mark – a milestone it had not touched in over three years.
After months of consolidation, XRP has staged a remarkable recovery, proving its strong resilience.
But now comes the real test.
A perfect combination of internal and external factors fueled this rally, which not only pushed XRP past the $1 level but also pushed it to the sixth position, surpassing Dogecoin [DOGE], with a market cap surge of more than 10% to $60.45 billion.
So, the big question is: Can XRP continue to climb and aim for the $2 mark, or is this rally too ambitious and still full of variables?
Memecoins could become an unexpected obstacle
Typically, Bitcoin [BTC] consolidation has been a key moment for alternative assets to gain traction as investors rebalance portfolios and reallocate risk.
As with previous trends, low- and high-cap assets dominate the weekly gainer list. Interestingly, 6 of the top 10 are meme-based tokens.
This shows that despite XRP’s massive 80% surge over the past week, it did not take the top spot as the top three memecoins still lead the pack.
The best-performing stocks alone saw weekly gains of four figures, adding fuel to talk of a possible “super cycle” forming.
Therefore, Memecoins are becoming a major challenge to XRP’s rally. Recently, the largest memecoin DOGE surpassed XRP in market capitalization and regained the sixth position.
Although Ripple has recovered its position after an impressive rally, the fact that DOGE could reverse again adds a layer of uncertainty to XRP’s rise.
Given this changing dynamic, Ripple may have to wait longer to reach the $2 mark.
This target seems somewhat optimistic, especially considering that memecoins are undergoing a major transformation from volatile assets to leading the market during periods of high volatility — a sign that they are evolving into legitimate players with real use cases. Meanwhile, looking at XRP’s daily chart, the asset has continued to present green candlesticks in less than 10 trading days, with daily gains reaching as high as 20%.
However, such a rapid rise could indicate overextension. If FOMO doesn’t return soon, weak investors could start taking profits, which could cause XRP to fall.
Bulls may have to turn $1 into support
XRP reserves continued to rise at the beginning of this month, reaching a peak five days ago when exchanges held 3.273 billion XRP, a significant increase of 5.41% from 3.105 billion in the first week.
Interestingly, in the second week, when Bitcoin surged to $90,000, driving other altcoins to surge, XRP’s price stagnated, which was reflected in the increase in exchange reserves.
However, as top altcoins reached overextended status and profit-takers began to exit, XRP’s exchange reserves fell significantly, falling to 3.228 billion.
This suggests that investors are concerned that Bitcoin is entering a “high-risk” zone and are therefore strategically reducing their exposure to risky assets.
They viewed the XRP price five days ago as a “drop” and used it as an opportunity to diversify their portfolio since most altcoins had already peaked.
Now, with foreign exchange reserves rising again, those same investors appear to be turning to other assets to put their surging funds to use.
This suggests that the $1 mark might just be a short-term event unless the bulls manage to turn it into solid support.
In order to maintain momentum, it will be crucial to turn $1 into support. If the bulls are successful, monitoring whale activity will become crucial as it could signal that the price will continue to rise towards $1.15.
However, rising selling pressure, an overheated RSI, and outperformance by memecoins present significant challenges. If this strategy fails, XRP could fall back to its baseline.
