XRP Price Rallies 40% This Week, Eyes $2 But Faces Overbought Conditions

XRP rallied to a new year-to-date high at $1.68 after the altcoin continued to form a higher high (HH) pattern.

Cryptocurrency XRP (XRP) price has surged 40% this week, reaching a new year-to-date high at $1.68 on Nov. 22. XRP price may potentially flip BNB to become the fifth-largest cryptocurrency in the market.

The altcoin has been forming a higher high (HH) pattern, with its last swing high forming at $1.68 on Nov. 16. XRP price has since pulled back slightly but is still trading within the uptrend channel.

XRP 4-hour chart. Source: Cointelegraph/TradingView

Active accounts on the XRP network have increased 100% in November

As XRP price increased 232% in 30 days, its onchain metrics also show a positive resurgence. According to data from xrpscan and highlighted by Cointelegraph, the number of active accounts or unique senders on the XRP network increased from 15,592 on Nov. 1 to as high as 47,044 on Nov. 16.

Number of active accounts on XRP ledger. Source: xrpscan

The overall average of active accounts doubled in November, rising from around 12,000 to 25,000 this month. In line with this, the number of new accounts activated on the XRP ledger also registered a significant spike in November, hinting at the influx of new users on the network.

Moreover, the bullish sentiment around XRP also picked up from Ripple’s strategic partnership with Archax to launch a tokenized money market fund on the XRP ledger.

Additionally, Bitwise, a crypto index fund manager, announced on Nov. 7 that it will be rebranding its European XRP ETP, giving European investors exposure to XRP through a physically backed product.

XRP eyes $2 but overbought conditions point to ‘distribution’

XRP’s recent breakout occurred after the price exhibited a bullish breakout from a bull flag pattern. A new higher high formed indicates a bullish continuation in the chart, which opens the possibility of further upside.

XRP 4-hour chart. Source: TradingView

Based on the Fibonacci extension rule from its trend swing low at $1, XRP’s immediate target lies between $1.95 and $2.05, comprising its previous bull-runs market top at $1.97, which will act as overhead resistance.

Mikybull, an independent crypto analyst, also mentioned the possibility of a $2 target and stated,

However, it is important to note that its mid-term and long-term charts illustrate clear bearish divergences.

XRP 1-day chart. Source: TradingView

Another important analysis is that price and trading volume have illustrated an inverse correlation since Nov. 16. It indicates that XRP is experiencing a distribution phase, where the market traders are potentially looking to sell.

Thus, the probability of a bearish market reversal increases, considering that trading volumes over the past three days were the lowest since Nov. 10.