XRP remains above $0.5: New rally underway?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
Ripple [XRP] was in an uptrend on the higher timeframe price charts. While most of the rest of the market traded within a range or had a bearish outlook on the higher timeframes, XRP was bullishly biased. The move higher from the $0.4 mark was a strong sign that bulls were in control of the market.
Even though the $0.5 mark was defended in recent days, the $0.52-$0.53 resistance loomed large. It had been significant in September and October 2022 and was tested as resistance yet again in March. Will this attempt result in a breakout?
Demand has been steady behind XRP
The fact that XRP could climb swiftly higher from the golden pocket was encouraging for long-term investors. It suggested that XRP could breach the $0.585 high and push toward $0.64. Yet, Bitcoin was beneath the $27.8k resistance.
A fall in BTC prices will likely negatively impact XRP. As long as the prices remain above $0.44, the bulls can still hope for a move higher. The OBV would also be important in the coming days. Recently it breached resistance from late March.
In the event of bearish pressure across the market, a bullish scenario for XRP would be a lack of a large selling volume. Hence, if the OBV does not dip steeply even in an XRP sell-off, bulls can hope for recovery once Bitcoin can find support.
To argue the bearish case, the retest of the $0.52 region to collect liquidity before forming a double top was a possibility. This was made less likely by the findings from the OBV.
Whale activity remains consistent, but dormant circulation spikes
Even though the OBV broke out past a resistance level, the bulls have cause for concern. The rising MVRV ratio meant holders were at a profit. They could choose to sell XRP to convert their paper gains into something tangible. The weakness of Bitcoin meant that taking a profit could become a priority soon.
Read Ripple’s [XRP] Price Prediction 2023-24
The second cause was the massive spike in dormant circulation on 1 June. This showed 1.31 billion tokens on the move and could presage an intense wave of selling.
Network growth was on the rise at press time, which was something the bulls can take heart in. Whale transaction counts trended slightly upward in May but were far from March’s highs when XRP embarked on a wild rally.