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XRP has experienced a small decline in value over the past few days, coinciding with a period of consolidation in the broader cryptocurrency market after four weeks of consecutive price increases.
Although data from CoinMarketCap at the time of writing puts XRP being up by 1.78% in the past 24 hours, a larger seven-day timeframe shows it is still down by 8.68%. On the other hand, price metrics including open interest on futures contracts and a bullish divergence with the RSI indicate the potential for a significant increase in the value of the token 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 drive the price up to his target of $1.35. The analyst took to social media platform X to point out two metrics indicating a bullish price and explain their significance.
Finally, $XRP.$XRP actually looks rather different to the other charts I’ve have just discussed.
We had $100m+ of OI added to the market in the highlighted spike (on the day of the fake ETF news).
Since this time, price has moved down and OI has stayed relatively flat. This… https://t.co/qkruUPopJ7 pic.twitter.com/SY9pEZs5mr
— Cryptoinsightuk (@Cryptoinsightuk) November 17, 2023
Exchange data shows more than $100 million of open interest on futures contracts was added to the XRP ecosystem on the day of the fake news surrounding BlackRock’s XRP ETF filing. XRP also experienced a significant price jump of 16% to $0.75 simultaneously. However, Cryptoinsightsuk pointed out that while the crypto has since lost this price spike, the amount of open interest has stayed relatively the same.
According to the analyst, since the price of XRP has gone down, the amount of open interest on futures contracts remaining the same means they are probably short trade positions. “This shows me, there are HUGE shorts on $XRP right now,” he said.
Taking a glance at the price chart that the trader provided indicates the formation of lower highs and lower lows by XRP. The recent action was a bounce up 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 might encourage people to cover their open short positions or close them out by placing buy trades, which in turn could lead to a more aggressive breakout in the market.
“This could cascade stop losses to the upside and push XRP on a fast move,” he said.
Bullish Divergence With The RSI
The trader also noted the recent creation of a higher low in XRP’s price created a bullish divergence with the RSI overbought/oversold indicator. This bullish divergence demonstrates that bulls are poised to regain control of the market and that bears are beginning to lose momentum.
“XRP will get sent to my target range of $0.89 – $1.35,” he predicted.
Cryptoinsightuk had initially created a daily countdown for an XRP price blast-off to a target of $1.06. However, the countdown has ended and XRP is yet to blast off.
“I was wrong on the date, but this is inevitable I feel,” the analyst said.
Featured image from Pexels
