XRP ( XRP ) has surged 26.50% in the last 24 hours to reach $1.95 on Nov. 30, its highest level since April 2021. Its rally has been driven primarily by rumors that the New York Department of Financial Services (NYDFS) will approve Ripple’s RLUSD stablecoin in December.

However, at least three XRP indicators point to bullish exhaustion in the coming days, which may result in a 20% correction from the current levels.

XRP price hits ascending channel’s resistance

The first signs of an impending XRP price correction come from its prevailing ascending channel.

On Nov. 30, XRP reached the resistance level of the said ascending channel, raising the likelihood of a near-term correction. That is akin to the cryptocurrency’s previous corrections after reaching the same resistance level, as illustrated below.

XRP price soars to 43-month highs, but is the rally over for now? image 0

XRP/USD four-hour price chart. Source: TradingView

Additionally, XRP’s relative strength index (RSI) on the 4-hour chart has entered overbought territory, above 80, signaling potential buyer exhaustion. Historically, such RSI levels have coincided with price drops.

A downside move could test support levels near $1.75, aligned with the channel’s lower trendline, or further down near the 50-EMA at $1.48, down about 20% from the current price levels.

XRP whales are selling at the highs

Whale addresses holding at least 100,000 XRP have decreased their balances as the token approaches its recent local highs.

Onchain data from Messari shows the supply held by these large wallets peaked at 90.73 billion XRP on Nov. 24 before slipping by 30 million XRP, signaling that some whales are selling at these multi-year highs.

XRP price soars to 43-month highs, but is the rally over for now? image 1

Addresses with over 100,000 XRP. Source: Messari

The move coincides with XRP’s price nearing the resistance of its ascending channel, currently at $1.90, boosting the downside scenario for a 20% price decline in December.

Overleveraged XRP risks long liquidation

XRP derivatives market has witnessed a 37% increase in open interest (OI) in the past 24 hours, hitting a record high of $3.19 billion, signaling heightened speculative activity in the market.

JA Maartun, an analyst at onchain data platform CryptoQuant, said the increase in XRP OI is similar to one that preceded a 17% drop between Nov. 23 and 26, noting that the cryptocurrency’s “leverage-driven pump” could lead to long liquidations.

XRP price soars to 43-month highs, but is the rally over for now? image 2

XRP price and OI 24-hour data. Source: CryptoQuant

Leveraged positions have liquidation prices, which are specific price levels where the trader’s collateral is insufficient to cover the losses. At this point, the exchange automatically closes the position, liquidating the trader’s assets.

Related: Is XRP price going to crash again?

If XRP prices fall rapidly, many over-leveraged traders can hit their long liquidation thresholds simultaneously. That forces the trader’s collateral to be sold into the market, accelerating price declines.