The recent surge in XRP’s value, surpassing $3, driven by large investors, has been profitable for patient traders, although maintaining this position has presented challenges. With a 53% increase year-to-date, investors are faced with a dilemma – Take profits now or continue to hold for potentially greater returns?
An Age-Old Conundrum in a Bullish Market
Among top-performing assets, XRP’s remarkable 40% monthly growth is noteworthy, especially given that more than half of this surge occurred within the past month. While this spike indicates a robust market rally, it also hints at rapid escalation, potentially too precipitous. This is further supported by the RSI, transitioning from neutral to overbought in just a few days.
In such market conditions, it is almost inevitable that some investors will choose to secure their profits.
Following a rapid 53% rise in XRP’s value in less than three weeks, it is unsurprising that some traders are choosing to cash out. Notably, over the past two days, the influx of XRP into Binance has soared to nearly 350 million, marking a substantial 1567% increase.
Nevertheless, an intriguing trend emerges – Despite profit-taking activities, significant investors remain steadfast. With approximately $4 billion accrued since the last significant market movement, the expected ‘massive’ sell-off has not materialized. Evidently, these prominent investors are focused on long-term gains rather than short-term victories.
If this pattern persists, it could set the stage for a substantial push towards the $4 mark, positioning holding onto XRP as a prudent decision for those aiming for enduring profitability.
XRP Facing Economic Disparity
Following XRP’s climb above $3 accompanied by a 17% spike, peaking at $3.50 – just 11% below its historical high from seven years ago – a subsequent 8% downturn has been observed. This pullback aligns with shifting market dynamics where supply has outpaced demand, creating an economic mismatch.
Presently, a selling sentiment is predominating in the perpetual market, underscored by a taker buy/sell ratio favoring shorts. The consequence? Long liquidations totaling $8.44 million.
Evidently, the Futures market is becoming increasingly precarious for XRP holders. Despite this, the Open Interest (OI) has only experienced a marginal decline of 0.70%, potentially indicating an impending squeeze on more long positions in the foreseeable future.
Why is this the case? In the immediate term, heightened volatility is expected as attention shifts towards Bitcoin amidst significant market movements. As capital migrates from XRP to BTC, the XRP/BTC pair has also trended negatively, signaling a redirection of market interest.
Unless large investors resume accumulating XRP, we might witness further profit-taking and compelled closures of long positions in XRP. Therefore, vigilance is paramount in the derivatives market.
Notwithstanding, within the spot market, the lack of aggressive selling by prominent investors indicates a firm belief in XRP’s potential.
If Bitcoin reaches its peak and profit-taking decelerates, XRP could experience an upsurge towards $4, making holding onto XRP a prudent long-term strategy.