The native token of XRPledger (XRP) gained 12% on November 29 as the altcoin held firm above $1.7300, rallying with Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), and other leading crypts.
The XRP indicators on the chain signal the price increase
XRP traders increased their activity on the chain between November 16 and 29, and Santiment recorded several spikes in the active addresses metric. The spikes represent the increase in activity, accompanied by a spike in the volume of transactions on the exchange platforms.
The network performed the profit/loss metric used to identify the net profit/loss of all tokens traded on a given day shows that XRP traders have been transacting profitably since November 4th. Positive spikes above the neutral line indicate the traders’ profit.
Typically, large positive spikes are associated with the probability of higher selling pressure on XRP; traders need to watch this metric closely for signs of a trend reversal.
The ratio of daily transaction volume on the chain in profit to loss is 6.73, which means that profitable transactions are dominant as XRP price manifestations.
On-chain metrics support a bullish thesis for XRP price alongside technical and other indicators.
XRP eyes retest of April 2021 peak
Technical indicators show the likelihood of an extended price rally and a retest of $1.9669, the April 2021 peak for the altcoin – a 12.85% increase from the current level. A successful breakout past this level could wipe out losses for traders over the past three years.
The relative strength index reads 88, which means XRP is overvalued. While typically this is considered a sell signal and could indicate an impending correction in XRP, the moving average convergence divergence (MACD) indicator is more likely to signal gains.
The green histogram bars above the neutral line support a thesis of the XRP price rally.
The $3 target is an important psychological level for XRP; in January 2018, the altcoin hit a record high at $3. The altcoin has not yet revised the level in the last six years.
XRP could find support between $1.2643 and $1.4033 in the imbalance zone. A correction could send the altcoin to this support zone before further correction. Once the fair value gap is filled, XRP could resume its climb towards the April 2021 peak of $1.9669.
XRP derivatives traders are turning bullish
Coinglass data shows XRP derivatives traders on Binance and OKX are bullish on the altcoin. There is a probability of a rally in the spot market, since the long / short ratio of derivatives translators ​​crosses 1 in the major exchanges.
Open interest in XRP futures crossed $2.41 billion on November 29. An increase in open interest is a sign of a higher relevance of the token and its growing demand among market participants.
Strategic considerations
XRP’s three-month correlation with Bitcoin is 0.82, according to Macroaxis.com. This metric shows that a significant market movement in Bitcoin could impact the XRP price.
Bitcoin started its recovery after the initial drawdown to the $90,700 level on Tuesday. If BTC records a major decrease in its price in the coming weeks, the price trend of XRP could be negatively affected.
Other market drivers for XRP are the US Securities and Exchange Commission’s lawsuit against Ripple and the progress in regulatory clarity on crypto in the states.
Disclosure: This article does not represent investment advice. The content and materials presented on this page are for educational purposes only.
