XRP has propelled itself to the third-largest cryptocurrency by market capitalization, surpassing Solana (SOL) and Tether (USDT). On Monday, December 2, the Ripple-backed cryptocurrency surged more than 25% in just 24 hours, reaching $2.4 per token, with its market cap crossing $140 billion.

This monumental rally marks a significant milestone for XRP, which has not only overtaken two major players in the crypto space but has also seen a surge in daily trading volume. At the time of this report, XRP’s daily volume had increased by 45%, reaching about $23 billion. This surge, driven by multiple factors, has set the stage for XRP’s bullish momentum to continue.

Ripple’s Strategic Move and the Impact of Short Liquidations

A major contributing factor to XRP’s sudden price jump is the activity in leveraged trading markets. According to data from Coinglass, over $50 million in leveraged positions were liquidated, with more than $36 million coming from short positions. This created a short squeeze, which helped fuel the rally as short traders were forced to close their positions, pushing the price even higher.

Ripple itself played a role in the price increase by unlocking 1 billion XRP from its escrow account. However, it immediately locked back 800 million XRP, suggesting that Ripple is managing its holdings carefully and strategically. This move, coupled with the heavy liquidation in the leveraged market, added to the bullish sentiment around XRP.

Additionally, whale activity has been noticeable in the past 24 hours. Large investors have been withdrawing significant amounts of XRP from exchanges, with platforms like Upbit and Binance leading the charge. This increase in whale transactions indicates strong support for XRP’s current price level and the potential for further gains.

Factors Behind XRP’s Surge

XRP’s impressive rise can be attributed to several key factors, including shifts in the broader crypto landscape. One of the most significant catalysts is the political climate in the United States. The election of pro-crypto leaders, including President-elect Donald Trump, is seen as a major boon for the crypto market. XRP has long faced legal hurdles, particularly with the U.S. Securities and Exchange Commission (SEC), but the expectation is that these charges will soon be resolved, especially with the anticipated confirmation of a new SEC chair early next year.

As the regulatory environment improves, investor confidence in XRP is growing. The anticipation of a more favorable legal and regulatory climate is likely to be driving the current market sentiment surrounding XRP.

Breaking Through Resistance: What’s Next for XRP?

XRP’s 25% surge is part of a larger bullish trend that has been unfolding over the past month. After a massive 280% increase in November, XRP has officially broken out of a multi-year triangular consolidation pattern. The cryptocurrency is now poised to retest its all-time high (ATH), which was established in 2018 and surpassed its 2021 bull cycle peak.

From a technical analysis perspective, XRP appears to be entering a parabolic phase, which suggests that further gains could be on the horizon. The weekly Relative Strength Index (RSI) for XRP has surged past the 85% level, the highest it’s been since 2021, signaling strong bullish momentum. This indicates that the bulls are in control and that XRP’s price could continue its upward trajectory.

However, as with any rapid price increase, traders should exercise caution. The sharp rally could lead to a potential correction before the price continues its upward journey. While the technical indicators are bullish, it’s important to acknowledge the risk of a pullback in the short term, particularly after such a strong breakout.

A New Era for XRP?

XRP’s remarkable ascent to the third spot in the crypto market is a testament to its growing importance and investor confidence. The combination of strategic moves by Ripple, favorable market conditions, and a surge in whale activity suggests that XRP is positioning itself for further success.

If the bullish trend continues, XRP could continue to outperform expectations, and the once-controversial cryptocurrency may be well on its way to setting new price records. For now, XRP holders are focused on the potential for continued growth as the coin navigates through this exciting phase.

As always, it’s crucial for investors to stay informed and be prepared for potential volatility, but with its current momentum and the factors supporting its rise, XRP’s future looks promising.