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Analysis

XRP gains 22% as Bitcoin breaks ATH, but here’s what the bears are doing

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XRP’s move up could be bad news for the bulls. Read to know more.
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XRP gains 19% in a day but the bears might have the last laugh
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  • XRP posted large gains as Bitcoin broke its all-time high.
  • Caution from XRP bulls was warranted based on the liquidity pockets.

Ripple [XRP] bulls burst into life on the 11th of March. They forced prices to appreciate by 22.37% from the day’s open at $0.608 to reach $0.744 before selling activity pushed prices below $0.7 again.

The token exceeded AMBCrypto’s expectations laid down in a recent report, where a move to $0.7 was anticipated. We got more than that, but it also raised questions about whether the demand would be sustainable.

Is a rejection underway now?

Ripple 1-day Chart

Source: XRP/USDT on TradingView

The $0.7 range highs were breached on the 11th, but the bulls were unable to defend this level as support. This was similar to the price action in early November when a swift rally to the $0.7 resistance was followed by a rejection that was just as quick.

The OBV was an encouraging sight as it broke above the highs from July and remained above. A sustained increase in the buying volume could keep the bears at bay, but it was unclear if this optimistic outlook would hold.

Instead, now that the liquidity just above $0.7 was swept, a move southward to $0.64 or $0.52-$0.54 could commence. Prices are attracted to liquidity, and despite the strength in the altcoin market, XRP has lagged.

The surge in Open Interest showed intense speculative activity

Ripple Coinalyze metrics

Source: Coinalyze

As XRP prices bounded higher, the Open Interest followed. It rose from $600 million to $830 million, and the spot CVD also ticked higher. Yet, the latter indicator continued its former downtrend.

Is your portfolio green? Check the XRP Profit Calculator

This was bad news for the bulls. It showed that the run upward was driven by the futures market and was indeed a liquidity grab, not a rally borne by genuine demand.

Hence, a retracement toward the $0.64 and $0.54 support levels could follow.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

 

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Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
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