Despite the prevailing negative market sentiment, Ripple [XRP] exhibited a bullish stance supported by its on-chain metrics signaling a potential price surge.
Starting from August 2024, XRP, alongside other major cryptocurrencies, faced a significant price drop likely influenced by the sharp decline in Bitcoin’s [BTC] price.
Anticipated 15% Upward Movement in XRP
Analysis of XRP’s essential on-chain metrics reveals a recent breakout from a trendline and a favorable bullish divergence on the chart, indicating a positive outlook for the token.
There is a strong likelihood that XRP could experience a 15% surge in the days ahead.
Recent data from CryptoCrypto suggests that XRP found support at the critical $0.55 level and the 200 Exponential Moving Average (EMA) on a daily timeframe.
Since July 2024, XRP has revisited this support level multiple times, with each instance resulting in a price increase of approximately 14%.
Currently, there is a high probability that history might repeat itself, potentially propelling XRP to the $0.65 mark or higher.
Furthermore, on a four-hour timeframe, XRP recently broke out of the trendline, accompanied by a bullish divergence in its Relative Strength Index (RSI), signaling a bullish trend.
During the recent market downturn, XRP’s price formed a lower low while its RSI indicated higher lows, leading to a bullish divergence that traders and investors interpret as a favorable buying signal.
Insights from On-chain Metrics
According to data from the on-chain analytics firm CryptoQuant, XRP’s exchange reserve hit a record low, aligning with the bullish sentiment.
A reduction in exchange reserves suggests that investors or major holders are accumulating tokens from exchanges, causing a continuous decline in reserves.
Additionally, CryptoQuant’s analysis of XRP’s exchange inflow showed a lower activity compared to previous days, hinting at a potential buying opportunity.
Presently, significant liquidation levels are seen around $0.555 on the lower end and $0.59 on the upper side, with many traders being over-leveraged at these points, as per CoinGlass data.
If market sentiment shifts and XRP’s price reaches $0.59, short positions worth nearly $6.8 million could be liquidated.
Conversely, in a bearish scenario where the price drops to $0.555, long positions totaling around $7.6 million might face liquidation.
With the current scenario favoring the bulls, there is a potential for the liquidation of short positions at this time.