XRP has been moving sideways for quite some time, encountering rejection at the $0.60 resistance level repeatedly over the past three months. The recent pullback from this critical level has led to an breakout from an ascending channel on the daily chart, signaling a possible shift in market sentiment.
Currently, XRP is being traded at around $0.5328, showing a 1.66% increase in the last 24 hours.
Are XRP bulls preparing for a comeback?
The $0.60 resistance level has proven to be a major roadblock for XRP, resulting in an extended period of consolidation. The recent rejection from this resistance level triggered a classic breakout from the ascending channel, causing a drop below both the 20-day EMA and the 50-day EMA – which are now acting as immediate resistance levels.
The downward trend of the 20-day EMA and the potential bearish crossover with the 200-day EMA suggest an increase in bearish momentum. If this crossover happens, XRP might continue to consolidate below the $0.56 resistance, limiting the chances of an immediate recovery.
However, XRP has shown a strong tendency to bounce back from the $0.52 support level. A sustained rebound from this level could help the cryptocurrency regain its EMAs, potentially setting the stage for a short-term recovery. If the momentum continues to build, a retest of the $0.56 resistance is likely, followed by $0.60.
At present, the RSI stands at 41.79, indicating a somewhat bearish sentiment. The recent movement of the RSI has shown flatter lows, contrasting with the higher lows seen on the price action since August, suggesting a mild bullish divergence. This hints at a potential recovery if the bulls intervene, although it depends largely on a broader shift in sentiment.
Insights from Derivatives data
Derivatives market sentiment for XRP appears mixed, with a slight inclination towards a bullish outlook. The 24-hour long/short ratio is approximately 0.9662 at the moment. Notably, the long/short ratios on Binance and OKX indicate a strong bullish sentiment – standing at 3.8216 and 3.11, respectively.
Of particular interest is the significant surge in XRP’s Options volume by over 753%, indicating a rise in speculative trading activity. Moreover, the Open Interest has increased by 3.3%, with a substantial uptick of 27.2% in Options Open Interest suggesting renewed interest among traders despite recent market downturns.
It is important to highlight that long liquidations have been on the rise, signaling profit-taking behavior as XRP struggled to sustain gains above $0.56. However, the presence of significant long positions among top traders implies that a potential recovery could still be in the works.