XRP, the cryptocurrency associated with the Ripple network, has experienced a significant pullback after its recent surge. The digital asset, which saw an impressive climb from $1.41 to $2.90 in early December, has dropped more than 17% in the past few days. As XRP retraces its gains, prominent trader Elon Trades has issued a cautionary message, warning investors that they might be “left holding the bag again,” referencing previous instances where XRP investors suffered significant losses.

XRP’s Recent Surge and Current Drop

XRP’s recent rally came after it broke through resistance levels, reaching its highest value in seven years. From November 26 to December 3, the altcoin surged by over 100%, peaking at $2.90. This swift rise triggered a wave of optimism within the XRP community, as many believed the digital asset had turned a new page in its long-term price trajectory. However, not all analysts were convinced that the rally would last.

As XRP reached its peak, some market watchers, including Bitcoin maximalists, predicted that the upward momentum would not be sustainable. These warnings proved prophetic, as the cryptocurrency quickly began retracing its gains. In the last three days, XRP has dropped to as low as $2.16, prompting further concern in the market.

Elon Trades’ Bearish Stance

Elon Trades, a well-known market analyst, has expressed his bearish outlook on XRP, suggesting that the recent price action may signify the end of its rally. He has pointed to the market’s volatility and pointed out that XRP’s previous price spikes have often resulted in dramatic collapses, such as in 2018, when the coin dropped from its all-time high of $3.31 to just $0.1140 by March 2020. Elon suggests that history may repeat itself and warns XRP holders to be cautious as their gains could quickly erode.

Elon’s skepticism is reflected in his recent trading decisions. He opened a $500,000 short position on XRP when the asset traded around $2.70 and has since seen a substantial profit. As the price of XRP dropped to the $2.3 region, Elon reported a gain of over $83,000, highlighting the benefits of his short trade amid the recent decline.

Bullish Sentiment Persists Despite Drop

Despite Elon’s warnings, many analysts maintain a bullish outlook for XRP in the long term. While the ongoing correction is seen as a healthy pullback by some, it is expected that XRP will rebound in the near future. Market analysts point to the fact that XRP is still up by 17% in December, outperforming Bitcoin, which recently surpassed the $100,000 mark.

Moreover, some analysts, such as Dom, have noted massive sell walls for XRP across major exchanges, suggesting that a pullback to the lower $2 range is not out of the question. However, Dom believes this would only provide a buying opportunity, as he expects a strong rebound for XRP in the weeks to come.

Conclusion

As XRP faces a sharp pullback after its impressive run, market sentiment remains divided. While traders like Elon Trades warn of the potential for further losses, others believe that the correction is a natural part of the market cycle and that XRP is poised for another upward leg. As the market continues to evolve, XRP investors will need to closely monitor price movements and stay prepared for potential volatility.