XRP price climbs as the January Effect kicks in, boosting the chances of a Ripple ETF approval

Ripple’s (XRP) price has been on a steady rise, showing an impressive increase over the first few days of the new year, hinting at the arrival of the January Effect. On Thursday, XRP surged to $2.40, marking its highest price level since December 18 and a 26% increase from its recent low the week prior. This upward momentum has led many to speculate that XRP could continue to rise in the coming weeks.

Several factors appear to be contributing to this surge in XRP’s price. One major factor is the upcoming inauguration of Donald Trump this month and the potential resignation of Gary Gensler, the current chairman of the U.S. Securities and Exchange Commission (SEC). Trump has nominated Paul Atkins, a veteran regulator with a history of supporting the crypto industry, as the next head of the SEC. This change could signal a shift in the regulatory landscape, potentially benefiting Ripple and other cryptocurrencies. While these developments have likely already been priced in by the market, it is expected that Ripple and its peers could see further gains as these events unfold.

Another reason for the rally is the growing optimism surrounding the approval of an XRP Exchange-Traded Fund (ETF). According to predictions on Polymarket, the odds of the SEC approving an XRP ETF have increased to 70%. If approved, this could lead to a surge in XRP purchases, similar to the impact seen when ETFs for Bitcoin (BTC) and Ethereum (ETH) were launched, bringing billions in assets to those tokens.

Ripple’s ecosystem is also expanding, which could further boost the value of XRP. The company’s stablecoin, Ripple USD (RLUSD), has been added to multiple exchanges, including Bullish, Independent Reserve, and Uphold, expanding the accessibility of Ripple’s products. Additionally, the XRP Ledger is poised for growth this year, particularly in the decentralized finance (DeFi) space and with real-world asset tokenization, which could further solidify Ripple’s role in the blockchain industry.

XRP’s price gains are also consistent with the typical January Effect—a phenomenon where investors return from the holiday season and buy up assets. This seasonal effect, coupled with the positive news surrounding Ripple, has helped drive the surge in XRP’s price.

From a technical analysis perspective, XRP’s recent price action aligns with the previous predictions of a price bounce. The recent pullback toward XRP’s 50-day moving average was viewed as part of a mean reversion, where the coin corrected toward historical averages before starting its next leg up. Furthermore, XRP has formed a bullish pennant chart pattern, characterized by a sharp upward move followed by a period of consolidation. This pattern often leads to a strong breakout, which appears to be happening now.

As a result, XRP’s price could continue its ascent, with the next resistance target around $2.90, which is about 21% higher than its current price. If the bullish trend continues, XRP could potentially push past the $3 mark, with the possibility of reaching $5 in the future. However, if the price drops below the 50-day moving average at $1.90, this bullish outlook would be invalidated, and the market could experience a significant pullback.

In conclusion, XRP’s price is experiencing positive momentum driven by a combination of favorable news, growing optimism about its ecosystem, and the seasonal January Effect. Investors and traders alike will be watching closely for further developments, particularly in regard to the potential Ripple ETF approval, as this could provide the catalyst for continued upward movement in XRP’s price.