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XRPLedger native token (XRP) rose 12% on November 29 as the altcoin settled above $1.7300, rising alongside Bitcoin (Bitcoin), Ethereum (Ethereum), Dogecoin (Doug), and other leading cryptocurrencies.
On-chain XRP indicators point to price growth
XRP traders increased their on-chain activity between November 16 and 29, and Santiment recorded several spikes in its active addresses metric. The increases represent an increase in activity, accompanied by a significant rise in the volume of transactions across the exchange’s platforms.
The network’s profit/loss metric that was used to determine the net profit/loss of all tokens traded on a given day shows that XRP traders have been trading profitably since November 4. Positive rises above the neutral line indicate traders are taking profits.
Typically, large positive spikes are associated with the potential for higher selling pressure on XRP; Traders need to closely monitor this metric for signs of a trend reversal.
The daily on-chain transaction volume ratio of profit to loss is 6.73, meaning profitable transactions dominate as XRP prices rise.
On-chain metrics support the bullish thesis for XRP price along with technical and other indicators.
XRP is looking to retest the April 2021 peak
Technical indicators show the possibility of an extended price rally and a retest of $1.9669, the altcoin’s April 2021 peak – a 12.85% rise from the current level. A successful breakout of this level could erase traders’ losses over the past three years.
The RSI reads 88, which means XRP is overvalued. While this is typically considered a sell signal and could indicate an impending correction in XRP, the Moving Average Convergence Divergence (MACD) indicator indicates the potential for further gains.
The green chart bars above the neutral line support the hypothesis of rising XRP prices.
The $3 target is a psychologically important level for XRP; In January 2018, the altcoin reached a record high of $3. The altcoin has yet to revise the level over the past six years.
XRP could find support between $1.2643 and $1.4033 in the imbalance zone. A correction may send the altcoin into this support zone before further correction occurs. Once the fair value gap is closed, XRP could resume its rise towards the April 2021 peak of $1.9669.
XRP derivatives traders are turning bullish
Coinglass data shows that XRP derivatives traders on Binance and OKX are bullish on the altcoin. There is potential for a rally in the spot market as the buy/sell ratio for derivatives traders exceeds 1 on major exchanges.
Open interest in XRP futures exceeded $2.41 billion on November 29. The rise in open interest is a sign of the importance of the token and its high demand among market participants.
Strategic considerations
The three-month correlation of XRP to Bitcoin is 0.82, according to Macroaxis.com. This metric shows that significant market movement in Bitcoin can impact the price of XRP.
Bitcoin has started to recover after the initial drop to the $90,700 level on Tuesday. If BTC records a significant decline in its price in the coming weeks, the price trend of XRP may be negatively affected.
Other drivers for the XRP market are the SEC’s lawsuit against Ripple and progress in regulatory clarity on cryptocurrencies in the US.
Disclosure: This article does not constitute investment advice. The content and materials contained on this page are for educational purposes only.
