XRP price continued to rise and became one of the best-performing large-cap cryptocurrencies in the market.

Ripple (XRP) rose over 12%, extending an uptrend that began on December 10 when the token bottomed at $1.9065.

The rally came after Ripple CEO Brad Garlinghouse announced that the company would launch the stablecoin RLUSD on December 17th. The stablecoin will initially debut on major exchanges such as Uphold, Bitstamp, MoonPay and others.

The launch comes after Ripple developers received approval from New York authorities following months of regulatory review. Ripple Labs aims to make RLUSD a significant player in the stablecoin industry by offering enterprise-level solutions.

Additionally, Ripple hopes that RLUSD will complement XRP to increase cross-border transaction volumes in the coming months.

Still, RLUSD faces significant risks. The biggest risk is that it will not be well received by users. Some stablecoins launched by large companies have failed to gain traction in the past.

For example, the market cap of Justin Sun’s USDD stablecoin is around $740 million since its launch in 2022. PayPal USD, launched by PayPal in 2023, has also struggled and has assets of $458 million.

On the other hand, Tether (USDT) has continued to expand its market share as its market capitalization has increased to over $140 billion. With market dominance of over 66%, it has become the most used stablecoin in the industry.

The XRP price chart highlights potential risks

The other potential risk to Ripple price is that users could sell the news. This is a situation where users buy an asset in anticipation of a major event and then sell it when it occurs. A good example of this is what happened after the last Bitcoin (BTC) halving in April. Bitcoin rose before the halving and then fell back again.

Another technical risk for XRP is a developing double top pattern at $2.90. A double top is a bearish chart formation that often precedes a price decline. In this case, XRP could reach $2.90 and then fall back to its neckline at $1.90.

Additionally, the coin could experience a mean reversion where the price falls back towards its key moving averages. Currently, XRP is trading around 60% above the 50-day moving average, increasing the chances of a correction.

Conversely, a rise above the double top resistance at $2.90 would negate the bearish outlook and could push XRP towards the $5 level.