Key Points
Price Growth Indicated by On-Chain Metrics
On-chain activity for XRP increased between Nov. 16 and 29, as recorded by Santiment. This was indicated by several spikes in the active addresses metric and a surge in transaction volume across various exchange platforms. The network realized profit/loss metric, which identifies the net profit or loss of all tokens traded on a particular day, showed that XRP traders have been transacting profitably since Nov. 4. Large positive spikes usually hint at higher selling pressure on XRP, and traders should monitor this metric for potential trend reversals. The ratio of daily on-chain transaction volume in profit to loss stands at 6.73, suggesting that profitable transactions are leading as XRP price rallies. These on-chain metrics, coupled with technical and other indicators, support a bullish outlook for XRP price.
Retesting of April 2021 Peak
Technical indicators suggest a likely extended price rally and a retest of the April 2021 peak of $1.9669 for XRP, constituting a 12.85% rise from the current level. A successful break beyond this level could offset the losses for traders over the past three years. While the relative strength index of 88 suggests that XRP is overvalued and could be due for a correction, the moving average convergence divergence (MACD) indicator signals probable further gains. The green histogram bars above the neutral line support the thesis of an XRP price rally. The $3 target is a significant psychological level for XRP; it reached a record high of $3 in January 2018 but has not revisited this level in the past six years.
XRP could find support between $1.2643 and $1.4033 in the imbalance zone. A correction could send the altcoin to this support zone before further correction. Once the fair value gap is filled, XRP could resume its rise towards the April 2021 peak of $1.9669.
Bullish Sentiment Among XRP Derivatives Traders
Data from Coinglass shows that XRP derivatives traders on Binance and OKX are optimistic about the altcoin. The likelihood of a rally in the spot market increases as the long/short ratio of derivatives traders crosses 1 on major exchanges. The open interest in XRP futures surpassed $2.41 billion on Nov. 29, indicating the token’s growing relevance and demand among market participants.
Strategic Considerations for XRP
XRP’s three-month correlation with Bitcoin stands at 0.82, as per Macroaxis.com. This means that any significant market movement in Bitcoin could influence the XRP price. Bitcoin began to recover after the initial fall to the $90,700 level on Tuesday. If BTC records a major price drop in the coming weeks, the XRP price trend could be adversely affected. Other factors influencing XRP are the U.S. Securities and Exchange Commission’s lawsuit against Ripple and progress in regulatory clarity on crypto in the states.