FOMO, funding rates, SEC fight

XRP began its strong uptrend immediately after the broader crypto market began to cool down.

XRP (XRP) hit an eight-month high of $0.73 late Tuesday and soon the price began to decline. The asset became the seventh largest cryptocurrency, surpassing USDC's $36 billion market cap.

Despite the slight price decline, XRP is still up 8% in the last 24 hours and is trading at $0.654 at the time of writing. The market capitalization is currently $37 billion.

XRP’s daily trading volume has almost tripled and surpassed the $12 billion mark. High trading volume usually results in high volatility.

One of the key factors driving XRP to break $0.74 is fear of missing out, according to Santiment.

At this point, over 4% of all crypto-related discussions on social platforms are related to XRP as its price approached the March high.

Data shared by Santiment shows two similar peaks in XRP’s social dominance. The first came in early August, when XRP rose from $0.44 to above $0.60 – indicating a local peak.

The second surge occurred in early October when XRP price plummeted from $0.64 to $0.52, marking its local bottom.

If XRP price gains momentum before its social rise subsides, the asset is likely to reach the $0.74 zone.

Another major catalyst could be the XRP funding rate on major crypto exchanges. For example, the Binance funding rate of the asset has a very high ratio of long to short positions. This could indicate a possible price correction if the number of long liquidations exceeds short liquidations.

XRP’s rally is also linked to Donald Trump’s victory in the US presidential election. The president-elect vowed to fire Gary Gensler, chairman of the U.S. Securities and Exchange Commission.

The SEC, under a crypto-friendly chairman, could potentially end its legal battle with Ripple, the company behind XRP, triggering another wave of FOMO among investors.

Most notably, Trump is considering Dan Gallagher, the chief legal officer at Robinhood, as Gensler's successor at the SEC.