RIP alt season? Despite Bitcoin’s $100,000 surge, XRP price falls 13%

XRP (XRP) fell 13% in the last 24 hours, trading at $2.30 on December 5, and is going in the opposite direction of Bitcoin (BTC), which finally broke the $100,000 mark.

The decline is part of a correction that began on December 3, which saw the price of XRP lose 25% of its value after reaching a multi-year high of $2.90.

Due to this decline, XRP’s market capitalization fell 8% to $133 billion over the same period, falling behind Tether USD (USDt) in fourth place.

Let’s take a closer look at the factors behind XRP’s continued selloff.

XRP wipes out all December gains compared to Bitcoin

XRP has been outperforming Bitcoin since November, rising approximately 354% between November 1 and December 5 compared to BTC’s 45.5% rise over the same period.

As a result, XRP trended higher against Bitcoin in November, reaching a 3.5-year high of 0.00003012 on December 3, driven by high network activity and generally positive market sentiment.

This ratio then dropped to 0.00002334 on December 5, wiping out all the gains made between December 1 and December 3.

relevant: Ripple’s RLUSD stablecoin: Here’s what you need to know before launch.

Interestingly, this happened as the price of Bitcoin broke the much-anticipated $100,000 mark, hitting a new all-time high of around $104,000.

At the same time, more than $12.79 million worth of long XRP positions were liquidated on December 5, compared to $7 million short liquidation, according to data from CoinGlass. This is likely to have contributed to downward pressure on prices.

The extinction of long positions coincides with a decline in open interest (OI) in XRP futures from $4.3 billion a day earlier. However, OI is still high compared to $722 million in early November.

Meanwhile, XRP’s 8-hour funding rate has surged from 0.0163% to 0.0553% over the past day, suggesting traders may be bullish on altcoins like XRP again.

The bull flag suggests that XRP’s bull run is not over yet.

From a technical perspective, the price action of XRP led to the formation of a 4-hour bullish flag pattern as shown below.

A bull flag is a bullish continuation setup that forms after a sharp rise in price and then the price consolidates within a descending range.

This pattern is resolved after the price decisively closes above the flag’s upper trendline at $2.37 and rises by the height of the previous uptrend.

This puts the upper limit target for XRP price at $4.83, a new all-time high.

Conversely, XRP’s Relative Strength Index (RSI) fell from an overbought 82 to 52 between December 3 and December 5. If RSI maintains this downward trajectory, the likelihood of a deeper decline increases.

Therefore, a pullback from $2.37 could retest the lower trend line around $2.05 contained in the 50-period simple moving average (SMA). Anything lower than that risks testing support at the 100 SMA around $1.68.

This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.