XRP Poised for Another 12% Rally: What to Expect

Analysis

The recent surge in XRP’s price, gaining 12% on November 29th, has been accompanied by a significant increase in on-chain activity and a shift in sentiment among derivatives traders. As we delve deeper into the technical and fundamental indicators, it becomes clear that XRP is primed for another leg up, potentially reaching the April 2021 peak of $1.9669.

XRP on-chain indicators signal price growth

• On-chain activity has increased significantly between November 16th and 29th, with Santiment recording several spikes in the active addresses metric.
• The network realized profit/loss metric shows that XRP traders have been transacting profitably since November 4th, with positive spikes above the neutral line indicating profit-taking.
• The ratio of daily on-chain transaction volume in profit to loss is 6.73, indicating that profitable transactions are dominant as XRP price rallies.

XRP eyes retest of April 2021 peak

• Technical indicators suggest a high likelihood of an extended price rally and a retest of $1.9669, the April 2021 peak.
• The relative strength index (RSI) reads 88, indicating that XRP is overvalued. However, the moving average convergence divergence (MACD) indicator signals further gains are likely.
• The $3 target is a psychologically important level for XRP, which has yet to be revisited in the past six years.

XRP derivatives traders turn bullish

• Coinglass data shows that XRP derivatives traders on Binance and OKX are bullish on the altcoin, with a likelihood of a rally in the spot market as derivatives traders’ long/short ratio crosses 1 on major exchanges.
• The open interest in XRP futures crossed $2.41 billion on November 29th, indicating a rise in the relevance of the token and its rising demand among market participants.

Strategic considerations

• XRP’s three-month correlation with Bitcoin is 0.82, indicating that a significant market movement in Bitcoin could impact the XRP price.
• Other market movers for XRP include the U.S. Securities and Exchange Commission’s lawsuit against Ripple and progress in regulatory clarity on crypto in the states.

Predictions

Based on the analysis, we predict that XRP will continue to rally, potentially reaching the April 2021 peak of $1.9669. This is supported by the increase in on-chain activity, the shift in sentiment among derivatives traders, and the technical indicators. However, it is essential to note that the market is inherently unpredictable, and there is a risk of a correction or a reversal in trend.

To mitigate this risk, traders should closely monitor the on-chain metrics, including the network realized profit/loss metric and the ratio of daily on-chain transaction volume in profit to loss. Additionally, they should keep an eye on the derivatives traders’ long/short ratio and the open interest in XRP futures.

Actionable insights

• Traders should consider long positions in XRP, potentially targeting the April 2021 peak of $1.9669.
• Traders should closely monitor the on-chain metrics, including the network realized profit/loss metric and the ratio of daily on-chain transaction volume in profit to loss.
• Traders should keep an eye on the derivatives traders’ long/short ratio and the open interest in XRP futures.

By following these actionable insights, traders can potentially capitalize on the predicted rally in XRP and achieve significant returns on their investment. However, it is essential to remember that the market is inherently unpredictable, and there is always a risk of a correction or a reversal in trend.