XRP surged 42% last week, hitting a new all-time high of $3.40 before stabilizing near $3.26. The altcoin outpaced Ethereum in 24-hour trade volume and rallied alongside Bitcoin, which recovered from a flash crash below $90,000 to close above $104,000 on Friday.

XRP/USDT daily price chart

Catalysts such as President-elect Donald Trump’s upcoming inauguration, optimism surrounding crypto regulations, and RippleNet‘s institutional adoption have fueled the rally. Analysts suggest XRP could enter price discovery if momentum persists.

On-Chain Indicators Signal Further Gains

XRP’s on-chain metrics paint a bullish picture. The total funding rate has remained consistently positive in January 2025, while active wallet addresses spiked significantly on January 16.

XRP on-chain analysis | Source: Santiment

Supply distribution metrics reveal that major XRP holders, owning between 10,000 and over 100 million tokens, have been accumulating. This trend indicates strong confidence in the token’s future prospects, despite rising prices.

Ripple Lawsuit and Market Drivers

Ripple’s ongoing legal battle with the U.S. SEC continues to influence XRP’s price. Despite the regulator’s appeal to classify retail sales of XRP as unregistered securities, the July 2023 ruling favoring Ripple has kept investor sentiment high.

Ryan Lee, chief analyst at Bitget Research, attributes XRP’s rise to “regulatory clarity and a more crypto-friendly political environment.” He predicts institutional investment could further solidify XRP’s position if regulatory uncertainties are resolved.

Other factors driving XRP’s rally include growing RippleNet adoption and developments in Ripple’s RLUSD stablecoin. Monday’s U.S. inauguration could also bolster market sentiment, adding another layer of momentum.

Technical Analysis: What’s Next for XRP?

At the time of writing, XRP trades at $3.24, hovering close to its peak. A 22% rally could push it into price discovery at the 141.4% Fibonacci retracement level of $4.16.

The token’s technical indicators support a bullish outlook. The MACD indicator flashes green, while the RSI, though overbought at 83, signals strong buying momentum. If a correction occurs, XRP may find support near the 50% Fibonacci level at $2.70.

Expert Insights and ETF Optimism

James Toledano, COO of Unity Wallet, highlighted investor optimism surrounding a potential XRP ETF. “An XRP ETF could unlock significant capital inflow and drive new highs in 2025,” he said. However, he cautioned that altcoin volatility might hinder consistency compared to Bitcoin ETFs.

“While regulatory clarity and pro-innovation policies are key, altcoins often experience episodic interest, making sustained rallies harder to predict,” Toledano added.

XRP’s bullish momentum is underpinned by optimism in regulation, institutional adoption, and technical strength. However, traders should remain vigilant, as market dynamics are influenced by macroeconomic and geopolitical factors. If XRP maintains its trajectory, 2025 could mark a breakout year for the altcoin.