The native token of XRPLedger (XRP) gained 12% on November 29 as the altcoin remained stable above $1.7300, alongside Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE) and other leading cryptocurrencies recorded a rally.

XRP on-chain indicators signal price growth

XRP traders increased their on-chain activity between November 16 and November 29, and Santiment saw multiple spikes in the active addresses metric. The spikes represent the increase in activity accompanied by an increase in transaction volume across all exchange platforms.

The network-realized profit/loss metric, which is used to determine the net profit/loss of all tokens traded on a given day, shows that XRP traders have been trading profitably since November 4th. Positive spikes above the neutral line indicate traders are taking profits.

Typically, large positive spikes are associated with the likelihood of higher selling pressure on XRP; Traders need to watch this metric closely to spot signs of a trend reversal.

The daily on-chain transaction volume ratio in profit to loss is 6.73, meaning profitable transactions dominate when the XRP price rises.

The on-chain metrics, alongside technical and other indicators, support a bullish thesis for the XRP price.

XRP retests April 2021 peak

Technical indicators show the likelihood of an extended price rally and a retest of $1.9669, the altcoin’s April 2021 high – a 12.85% increase from current levels. A successful break above this level could wipe out traders’ losses over the past three years.

The Relative Strength Index is 88, meaning XRP is overvalued. While this is usually viewed as a sell signal and could indicate an impending correction in XRP, the moving average convergence divergence (MACD) indicator suggests that further gains are likely.

Green histogram bars above the neutral line support the thesis of an XRP price rally.

The $3 target is a psychologically important level for XRP; In January 2018, the altcoin hit a record high of $3. The altcoin has not yet reached the levels seen in the last six years.

XRP could find support in the imbalance zone between $1.2643 and $1.4033. A correction could send the altcoin into this support zone before another correction. Once the fair value gap closes, XRP could continue its rise towards the April 2021 high of $1.9669.

XRP derivatives traders are becoming bullish

Coinglass data shows that XRP derivatives traders on Binance and OKX are bullish on the altcoin. There is a likelihood of a recovery in the spot market as the long/short ratio of derivatives traders on major exchanges crosses 1.

Open interest in XRP futures surpassed $2.41 billion on November 29th. An increase in open interest is a sign of higher relevance of the token and its increasing demand among market participants.

Strategic considerations

According to Macroaxis.com, XRP’s three-month correlation with Bitcoin is 0.82. This metric shows that a significant market movement in Bitcoin could have an impact on the XRP price.

Bitcoin began its recovery after the initial decline to the $90,700 level on Tuesday. If BTC experiences a sharp price drop in the coming weeks, this could have a negative impact on XRP price development.

Other market drivers for XRP include the U.S. Securities and Exchange Commission’s lawsuit against Ripple and progress in regulatory clarity on cryptocurrencies in states.