Ripple’s XRP token is currently trading at $1.11 as of Wednesday, maintaining its position as the best-performing cryptocurrency among the top 20 by market capitalization. With an impressive 50% rise in the past week, XRP is showing strong bullish momentum, backed by both on-chain data and technical patterns. If the upward trend continues, XRP could be poised to rally towards the $1.96 mark.XRP’s On-Chain Data Reflects Bullish Sentiment
A key indicator of XRP’s bullish momentum lies in its on-chain data. In the past seven days, there has been a significant withdrawal of XRP tokens from major exchanges, particularly from Upbit, a Korean exchange with the largest XRP reserve. According to CryptoQuant data, nearly 250 million XRP tokens were withdrawn from Upbit, reducing its XRP reserve to a four-month low of 6.3 billion XRP. A similar trend has also been observed in Binance, where XRP reserves began to trend downward after hitting a peak on November 12.
When exchange reserves of an asset decrease, it typically signals rising buying pressure, as investors are moving their tokens off exchanges, potentially in preparation for holding or using them long-term. This shift in behavior suggests that market participants are anticipating further price increases for XRP.
Futures Open Interest and Leverage Ratios Point to Continued Uptrend
The futures market also reflects the growing bullish sentiment surrounding XRP. The open interest for XRP futures surged to an all-time high of $1.98 billion on Sunday, signaling increased investor interest. By early Wednesday, the open interest settled at $1.84 billion, according to Coinglass data. Open interest refers to the total number of outstanding contracts in a derivatives market, and this surge suggests that investors are expecting further upside for XRP.
Additionally, XRP's estimated leverage ratio (ELR), which measures the use of borrowed capital in the market, has been trending upwards. The ratio reached its highest level since January, hitting 0.17 on Saturday. While this indicates that investors are confident in the uptrend, it’s also worth noting that high leverage ratios can often precede sharp price corrections. Therefore, caution is advised as the price of XRP continues its climb.
Futures Liquidations and Price Action Analysis
XRP has been trading comfortably above the $1.10 level, even after seeing $9.62 million in futures liquidations. Of this total, $6.23 million came from liquidated long positions, while $3.38 million came from short positions. The presence of liquidations on both sides can indicate market volatility, but it also demonstrates that XRP’s price movement is keeping traders on edge as they try to anticipate the next major move.
Looking at the technical chart, XRP is testing a crucial resistance level at $1.35, a price point that has served as a significant barrier for the token over the past three years. If XRP can maintain an extended move above this level, it will validate the current bullish pattern and open the door to a potential rally toward $1.96, which would mark the next resistance zone.
The Path to $2: Key Resistance Levels to Watch
If XRP breaks through the $1.96 resistance, it will be poised to reach the $2 range, a price level not seen in nearly six years. A move above $1.96 would likely ignite strong buying momentum, potentially setting XRP on a trajectory to new highs. However, the market must first clear the $1.35 resistance before moving toward these higher levels.
RSI and Awesome Oscillator Suggest Caution Amid Rising Bullish Momentum
While XRP remains in a strong uptrend, technical indicators are signaling that a price correction may be on the horizon. The Relative Strength Index (RSI) is currently in the overbought zone, suggesting that the token could be due for a pullback in the short term. The RSI measures the speed and change of price movements, and readings above 70 generally indicate that an asset is overbought and may experience a correction.
On a more positive note, the Awesome Oscillator (AO), which helps track market momentum, has posted consecutive green bars above its neutral level. This indicates that bullish momentum is still in play, although traders should remain cautious of any price corrections.Potential Bullish and Bearish Scenarios
XRP’s immediate future depends on its ability to maintain bullish momentum above key support levels. If the token can stay above the critical $1.35 resistance and continue to show strong buying pressure, it could easily test the $1.96 resistance and possibly surge above it. However, if XRP fails to sustain its uptrend, particularly if it drops below the $1.10 mark, a pullback could occur.
In a bearish scenario, a daily candlestick close below $0.74 would invalidate the bullish thesis and potentially push XRP’s price toward lower levels, with $0.38 being a key support level to watch.
Conclusion: What’s Next for XRP?
Ripple’s XRP token is exhibiting strong bullish momentum, driven by favorable on-chain data, rising futures open interest, and a positive technical outlook. If the token can break through the three-year resistance at $1.35, it may continue its rally toward the $1.96 mark and even test $2 for the first time in six years. However, caution is necessary as the RSI indicates the token may be due for a price correction in the short term. Investors should closely monitor XRP’s ability to hold key support levels and break through resistance to validate the ongoing uptrend.
November 2024, Cryptoniteuae