XRP saw a 1.151% increase in November trading activity on the eToro investment platform, according to the company’s latest report. This is because the XRP price rose to $ 0.92 on Coinbase at its monthly high and ended the month with a 283% gain at around $ 0.61.
Peak in retail interest, trading activity
Bitcoin (BTC) approached $ 19,000 for the first time since December 2017, when large-cap altcoins like XRP started to rise in November.
The optimistic market sentiment surrounding Bitcoin has likely prompted traders to look into higher risk trades in the short term. The result was a big surge in volume as traders rushed to altcoins.
Simon Peters, a market analyst at eToro, explained that the increase in XRP’s monthly trading activity makes perfect sense. He stressed that trading volume is usually accompanied by large price movements. Peters said:
Bitcoin has been the focal point for much of the crypto community, but altcoins are also making waves as investors look for alternative crypto assets to diversify and make a profit elsewhere. XRP’s rise in month-on-month trades makes perfect sense in the context of November’s price hike. The token increased from $ 0.240 at the beginning of November to $ 0.661 at the end of it. “
Other likely factors include historical market trends and a spike in retail interest. In January 2018, the altcoin market saw a mania driven by private investors. At the time, XRP and Ether (ETH) were the main drivers of the altcoin market rally.
In fact, the Google search term ‘XRP’ rose to its highest level in three years in the past month, suggesting that retailers were returning. The most likely reasons for this include the outbreak of XRP a multi-year downward trend and the perceived “cheaper” value compared to Bitcoin in the eyes of the public.
Altcoins follows Bitcoin’s lead in a bull market
Altcoins tend to accumulate and catch up when Bitcoin remains stable during a bull market. This trend occurs because traders are often looking for higher risk games when the BTC price consolidates.
Peters noted that in November, Bitcoin saw an explosive price move and small, if not predictable, downturn. For altcoins, this is an ideal time to make a profit as it makes them more attractive to retailers. Peters added:
“Bitcoin exploded in November, breaking through resistance level after resistance level, with only minor and relatively predictable retracements.”
On the other hand, altcoins are always at risk of a major crash in the event of a BTC price correction. During bull markets, altcoins are likely to follow BTC’s price movement, albeit with more volatility, putting altcoins at risk of extreme short-term price swings.
Nevertheless, technical analysis shows good prospects for XRP, the price of which is now at its highest level in more than two years.
“The higher timeframes give a clearer indication of where XRP is in the market cycle,” noted trader Michaël van de Poppe in his latest XRP price analysis. “A multi-year downward trend has been broken upwards, meaning that declines are likely to be considered entry opportunities for traders.”
“With this in mind, if XRP holds USD 0.45 as support, continuation towards USD 1.00 is likely, especially if Bitcoin price hits a new record.”