Since last December, Ripple’s XRP has been exhibiting a unique trading pattern characterized by increased large sell orders and a growing number of aggressive buy orders.
The substantial size of these sell orders suggests possible whale activity, indicating that major holders might be scaling back their positions given the profitability at the $0.300 price level.
On the other hand, the rise in buy orders indicates the interest of retail investors in acquiring this U.S.-based cryptocurrency.
This interplay could result in heightened price volatility for XRP, with large sell orders potentially pushing prices down while retail investors’ buying activity might offer some upward momentum.
With continued whale selling and robust retail interest, XRP could potentially witness a more evenly distributed ownership structure, which could lead to price stabilization.
However, if whale transactions persist, it could result in significant price fluctuations, impacting short-term market sentiment and potentially dissuading new retail investments due to increased risks.
XRP Price Forecast and Market Movement
An assessment of the XRP/USD pairing revealed a period of restricted price volatility, culminating in an 18-day low.
This constrained trading pattern signifies a potential upsurge in volatility, mimicking recent movements in Bitcoin, hinting at a building momentum.
The critical barrier lies at $3.20, aligning with the ATH Volume Weighted Average Price (VWAP) and the weekly relative VWAP.
A definitive breakout above this level could trigger a bullish rally, stimulating a potential push towards higher resistance levels.
Conversely, failure to breach the $3.20 threshold could reinforce the $2.90 region as a solid support level.
Historically, this level has acted as a key support during recent pullbacks, serving as a starting point for price rebounds.
However, persistent selling pressure beneath this support level may instigate a downturn, prompting a test of lower support zones around $2.60, characterized by earlier consolidations and the 1-month VWAP.
The converging VWAPs around the $3.20 mark and the coiling price action paint a pivotal moment for XRP. Overcoming this resistance could strengthen the bullish outlook, potentially paving the way for revisiting previous price highs.
Alternatively, a failure to breach this critical level might prompt a retreat to test foundational support levels, subsequently determining the short-term market direction.
Potential Benefits for U.S.-Based Cryptocurrencies
In other developments, Eric Trump’s announcement confirmed that U.S.-based crypto projects will enjoy a zero capital gains tax burden, whereas non-U.S. projects will face a 30% tax levy.
This policy shift is designed to encourage investments in domestic crypto enterprises.
For U.S. investors, this tax exemption could enhance XRP’s appeal as an asset, potentially leading to a surge in demand and an uptick in its market valuation.
Nevertheless, it’s crucial to acknowledge that the broader cryptocurrency landscape is subject to diverse influences, including regulatory reforms, market sentiments, and technological advancements.
Therefore, while the tax policy may create a favorable environment for XRP, investors are advised to exercise caution and conduct comprehensive research before embarking on investment decisions.