Ripple’s XRP has become the third-largest cryptocurrency by market cap, overtaking notable tokens such as Solana, USDT and Binance Coin as the landscape for crypto-friendly policies begins to change in Washington, DC

On Monday, XRP shot up an impressive 40% in 24 hours, reaching $2.80 – a milestone it hadn’t reached in seven years. The cryptocurrency has attracted over $120 billion in new investments, increasing its market cap to $156 billion following the election of Donald Trump and other pro-crypto candidates on November 5.

Crypto news reports that the main reason for XRP’s rally was Trump’s victory, which was expected to lead to more favorable regulations for the crypto sector. This is particularly important for Ripple Labs, which has been embroiled in litigation with the Securities and Exchange Commission since 2020.

The election results have also revived hopes for a spot XRP exchange-traded fund (ETF) by 2025. Earlier this week, asset manager WisdomTree, which manages $111 billion in assets, filed for a spot Ripple ETF.

In a recent X post, CryptoQuant CEO Ki Young Ju highlighted that whale activity on Coinbase was a key driver of the XRP rally, with exchange premiums increasing between 3% and 13%. In contrast, South Korea’s Upbit exchange, known for its significant XRP trading base, did not see such a premium during this period.

Coinbase whales are driving this $XRP Rally.

Over the past 30 days, Coinbase’s per-minute price premium has ranged from 3% to 13% during the surge.

Meanwhile, Upbit – a Korean exchange with more XRP investors than Binance – has not yet shown a significant markup. pic.twitter.com/ENESB2Zrkv

— Ki Young Ju (@ki_young_ju) December 2, 2024

According to Santiment, a leading analytics firm, wallets with a value between 1 and 10 million XRP accumulated 671 million coins in three weeks. This was the first significant increase in non-empty wallets in eight years, driven by FOMO-driven purchases.

🚀 XRP has risen to an astounding market value of $2.49 for the first time since January 8, 2018. The 6-year (almost 7-year) peak comes as wallets holding 1M-10M XRP have accumulated 679.1M tokens (currently worth $1.66B). in just 3 weeks. Additionally, completely non-empty XRP wallets have… pic.twitter.com/bIsfOqdCQX

— Santiment (@santimentfeed) December 2, 2024

However, Ripple’s price could face a possible decline in the coming weeks. Currently, XRP is trading well above its short- and long-term moving averages, suggesting the possibility of mean reversion, where prices tend to return to their average levels over time.

Additionally, technical indicators such as the Relative Strength Index (RSI) and the Stochastic Oscillator signal overbought conditions, suggesting possible price weakness. XRP may also be in the markup phase of the Wyckoff method, a phase characterized by demand exceeding supply. This phase is often followed by the sales phase, which typically ends in a sell-out.

Should a pullback occur, XRP could pull back and retest support at $1.9697, a critical level last reached in April 2021.