As the cryptocurrency market experiences a period of price adjustments, the on-chain data for XRP is raising red flags. Since September 14th, the token has been trading within a narrow range of $0.558 to $0.598.
Surge in XRP Exchange Reserves
Over this consolidation phase, the reserves of XRP on exchanges have notably surged, as reported by CryptoQuant, an on-chain analytics company.
The continued increase in exchange reserves implies heightened selling pressure, which could potentially lead to a further decline in the token’s price.
Traders and investors view a rise in exchange reserves as a potential indicator for a sell-off, as it signifies that large holders and institutions are depositing more coins on exchanges in preparation for potential sales, thus increasing the overall exchange reserves.
Current Market Momentum for XRP
Despite the surge in exchange reserves, XRP’s price has remained stable. Currently trading around $0.586, the token has experienced a slight decrease of 0.45% in the last 24 hours.
Simultaneously, trading volume for XRP has dipped by 4.8% during the same period, indicating reduced trader participation likely due to the ongoing market correction.
Technical Analysis and Key Levels
Technical analysis from CryptoCrypto indicates that XRP is on an upward trajectory, supported by its trading above the 200 Exponential Moving Average (EMA) on the daily chart.
The 200 EMA serves as a crucial tool for traders and investors to determine the market trend of an asset.
Given the recent surge in XRP’s exchange reserves, it becomes imperative to assess whether the token will witness a rally or a drop in the coming days.
Based on the price movement, a breakout from the current consolidation range with a daily candle closing above $0.60 could potentially push XRP towards $0.72. Conversely, a breakdown below $0.545 may lead to a drop towards $0.464.
Concerning On-Chain Metrics for XRP
Further accentuating the negative outlook are the on-chain metrics. According to Coinglass, an on-chain analytics firm, XRP’s Long/Short Ratio stood at 0.955 at the latest reading, indicating prevailing bearish sentiment in the market.
Moreover, the Futures Open Interest for XRP has been relatively stable, signifying that traders are awaiting a decisive move out of the current consolidation phase.