As a seasoned analyst with over two decades of experience in the financial markets, I have seen countless bull and bear runs, and the current XRP rally is no exception. The rapid surge past the $1 mark was indeed impressive, reminiscent of the dot-com boom in the late 90s, but as we all know, what goes up must come down.
As a researcher, I’m excited to share that on November 16, XRP (XRP) surpassed the $1 mark, reaching a three-year peak at $1.26. This significant rise can be attributed to optimistic expectations surrounding a more favorable regulatory landscape for cryptocurrencies and the potential resolution of Ripple’s prolonged legal dispute with the United States Securities and Exchange Commission (SEC).
The price of XRP has dropped considerably since then, causing speculation as to whether $1.26 marked a peak, at this point in time.
XRP whales take profits
The dip in the value of XRP on November 17 coincides with significant deposits totaling tens of millions of dollars into platforms like Bitstamp and others, as indicated by data from Whale Alert.
A whale moved 10 million XRP tokens, equivalent to approximately $11.3 million, into the Bitstamp digital exchange. It’s plausible that this transfer signifies the investor’s plan to sell these tokens, capitalizing on their profits after the significant surge in XRP’s market value.
As an analyst, I find it noteworthy that these significant XRP transfers to exchanges coincide with a pivotal change in the distribution pattern of XRP holdings. This alignment suggests a potential strategic move by key players in the market.
To put it simply, there’s been a notable rise in the amount of XRP available on cryptocurrency exchanges, as suggested by information from CryptoQuant. The graph demonstrates that the XRP held by exchanges grew by approximately 3% during the period between November 6th and November 16th.
It’s worth mentioning that there was an increase of approximately 44 million units of XRP held on exchanges from November 13 to November 16. Coinciding with this, the price of XRP saw a surge of around 56% during the same period.
This suggests possible whale profit-booking to drive the 13% pullback since the Nov. 16 highs.
Moreover, Santiment notes that retail traders have been offloading their XRP during any minor price increase, and this pattern persisted even after the price reached $1.26.
Over the past week, wallets containing less than 1 million XRP have offloaded approximately 75.7 million tokens, equivalent to around $87.9 million, according to recent information from an on-chain data provider. (Nov. 17 post on X)
As a crypto investor, I find it intriguing to see that when retail traders are offloading their tokens, large-scale investors, often referred to as ‘whales’ or ‘sharks,’ with holdings ranging from 1 million to 100 million tokens, step in to buy. This could be a positive sign for the future, indicating potential price appreciation as these whales may hold onto their investments for long-term growth.
Santiment notes that:
“This group has collectively accumulated 453.3M more tokens (worth $526.3M) in the past week alone.”
As a crypto investor, I was taken aback when XRP suddenly deviated from its multi-year peak of $1.26, demonstrating the unpredictable nature of the cryptocurrency market and reminding us all about its inherent volatility.
Data from CoinGlass shows that the XRP derivatives market witnessed over $12.6 million worth of liquidations on Nov. 17, out of which $9.1 million were long, with the tally continuing at the time of publication.
Over just the past 4 hours, more than 3.9 million dollars worth of long positions that were boosted by leverage have been closed out or sold off.
When a long position is closed or terminated, this often means selling the underlying asset either on one’s own initiative or at the broker’s discretion, which can lead to additional price drops.
XRP price “overbought” on multiple timeframes
In four out of the past six periods, a chart displaying the Relative Strength Index (RSI) for XRP indicates that it’s experiencing signs of being overbought, based on information from CoinGlass.
By comparison, Bitcoin’s RSI is overbought on three of six timeframes.
Overbought conditions generally describe recent movements in the price of an asset and reflect an expectation that the price trend may correct soon.
But despite this popular metric showing potential overheating, traders believe that the XRP price rally is not over.
In a recent post on X, independent trader Chris McCrypto remarked, “We’re still quite early in the market cycle for such a significant XRP surge.” He further speculated that the price of XRP might reach between $15 and $20.
In simpler terms, the anonymous expert CryptoCharged stated that the recent dip in price has allowed it to test crucial levels with precision. If the price drops to the range of $0.65 to $0.75, this event could pave the way for an upward trend once again.
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2024-11-17 13:01