Analysis
XRP stays bullish but a push beyond this key level could dictate the future
Posted:
| Last updated: January 30th, 2024
Journalist
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- XRP has demand, a bullish structure, and momentum behind it as the price climbed toward the $0.55 resistance
- The move above $0.5 noted bullish intent but buyers must beware of a shift in the market structure on the lower timeframes
Kaiko, the digital assets data provider, noted that an additional $4 million was added to the Ripple [XRP] market depth. It rose from $8 million to $12 million in early September, which was good news for traders as it shows large volume orders won’t cause undue volatility.
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While this is a positive development, it is unlikely to sway the short-term market sentiment. XRP was bullish but faced a higher timeframe resistance zone to the north that extended to $0.55. If the bulls can clear this obstacle, the chances of a rally will strengthen.
The breach and retest of $0.5 gives XRP bulls the confidence to push for further gains
Source: XRP/USDT on TradingView
On 19 September, XRP closed a four-hour trading session above the previous lower high at $0.5076 from 8 September. As noted in a recent report, this was a critical short-term level for the bulls as a move above meant the H4 market structure was flipped bullishly.
The Relative Strength Index (RSI) showed strong upward momentum with a reading of 58 while the On-Balance Volume (OBV) has inched its way higher in the past week. It was unclear if this could last, as the $0.513-$0.55 region (red box) was a bearish order block from the 1-day chart.
Hence, the chances of a bearish reversal were heightened when the price was within this region. Buyers can remain cautious and wait for a clear move past $0.55 to take a high-probability long trade. Meanwhile, sellers can wait for a lower timeframe structural shift to enter short.
The market sentiment favored buyers as demand for XRP persists
Source: Coinalyze
Over the past week, the price of XRP has trended higher. The one-hour chart from Coinalyze showed that the Open Interest (OI) also trended upward, especially after 18 September. The spot Cumulative Volume Delta (CVD) also noted large bumps that drove it higher in the past ten days highlighting demand in the spot market.
Realistic or not, here’s XRP’s market cap in BTC’s terms
A move below $0.5066 would be the first sign that a short trade was viable. Traders can also watch for Bitcoin to fall below $26.6k. However, the evidence at hand showed that more gains were likely for XRP and that bulls would likely be rewarded for their conviction.
