XRP has seen a slight drop in value over the past few days, coinciding with a period of consolidation in the broad sense cryptocurrency market after four weeks of consecutive price increases.
Although data from CoinMarketCap at the time of writing puts XRP being up 1.78% in the last 24 hours, a longer seven-day period shows it is still down 8.68%. On the other hand, price indicators including futures open interest and a bullish divergence with the RSI indicate the potential for a significant increase in the token’s value in the near future.
Crypto Analyst Sees Solid XRP Price Action
According to crypto analyst Will Taylor known as Cryptoinsightsuk on social media, XRP is showing signs of bullish momentum that could push the price up to its target of $1.35. The analyst took to social media platform X to highlight two metrics indicating a bullish price and explain their meaning.
We added over $100 million of OI to the market during the highlighted peak (the day of the fake ETF news).
– Cryptoinsightuk (@Cryptoinsightuk) November 17, 2023
Exchange data shows that over $100 million in futures open interest was added to the XRP ecosystem on the day of the fake news surrounding BlackRock’s XRP ETF filing. XRP also saw a significant price increase of 16% at $0.75 simultaneously. However, Cryptoinsightsuk pointed out that even though the cryptocurrency has since lost this price surge, the amount of open interest has remained relatively the same.
According to the analyst, since the price of XRP fell, the amount of open interest on futures contracts remaining the same means that these are likely short trade positions. “This shows me that there are HUGE shorts on $XRP right now,” he said.
A look at the price chart provided by the trader indicates the formation of lower highs and lower lows by XRP. The recent action has been a bounce and it is now approaching the descending upper trendline formed by the lower highs. He noted that a break above the descending trendline could be the start of an uptrend for XRP.
Total crypto market cap is currently at $1.3 trillion. Chart: TradingView.com
This could encourage people to cover their open short positions or close them by making buy trades, which could lead to a more aggressive market breakout.
“This could result in upside stop losses and push XRP into a rapid move,” he said.
Bullish divergence with the RSI
The trader also noted that the recent creation of a higher low in the XRP price has created a bullish divergence with the RSI overbought/oversold indicator. This bullish divergence demonstrates that the bulls are about to regain control of the market and the bears are starting to lose momentum.
“XRP will be sent to my target range of $0.89 to $1.35,” he predicted.
“I was wrong about the date, but I think it’s inevitable,” the analyst said.
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