Since December, Ripple’s digital asset XRP has displayed a unique trading pattern characterized by a surge in aggressive sell orders and a notable increase in aggressive buy orders.
The large size of these sell orders suggests significant activity by whales, implying that major holders might be offloading their positions due to the profitable $0.300 price level.
On the other hand, the rise in buy orders indicates that individual investors are showing interest in acquiring this U.S.-based cryptocurrency.
This situation could result in heightened price volatility for XRP, with substantial sell orders pushing prices down while retail investors’ buying activity offers some upward momentum.
If whales persist in selling and retail investor interest remains robust, XRP’s ownership distribution could become more balanced over time, potentially stabilizing its price fluctuation.
However, continued dominance of whale transactions may lead to significant price swings, impacting short-term market sentiment and potentially discouraging new retail investment due to heightened risk.
XRP Price Movement and Forecast
An examination of the XRP/USD pair reveals a phase of restricted volatility, culminating in an 18-day low period.
This compression signals potential upcoming volatility, as seen in recent movements in Bitcoin indicating a building momentum.
The crucial resistance level stands at $3.20, corresponding to the ATH Volume Weighted Average Price (VWAP) and the weekly relative VWAP.
A conclusive breakthrough past this level could trigger a bullish rally, potentially propelling prices towards exploring higher resistance levels.
Conversely, failure to surpass the $3.20 mark could solidify the $2.90 range as a supportive region.
This level has consistently provided a foundation during recent price pullbacks, serving as a launching pad for recoveries.
Persistent pressure beneath this support level might initiate a decline, leading to a test of lower supports at $2.60, indicated by previous consolidations and the 1-month VWAP.
The coiling price action and the convergence of VWAP at $3.20 signify a critical juncture for XRP. Overcoming this resistance could validate the bullish sentiment, potentially paving the way for testing previous peak levels.
Failure to breach this threshold might prompt XRP to retreat and test fundamental support levels, consequently determining the short-term market direction.
Advantages for U.S.-Based Cryptocurrencies
In recent developments, Eric Trump confirmed that cryptocurrencies originating from the U.S. will enjoy exemption from capital gains tax, while those outside the country will face a 30% tax rate.
This policy aims to encourage investment in domestic cryptocurrency projects.
For U.S. investors, this tax relief could enhance XRP’s appeal as an asset, potentially leading to increased demand and a surge in its market valuation.
However, it’s crucial to recognize that the broader cryptocurrency market is influenced by a myriad of factors, encompassing regulatory shifts, market sentiment fluctuations, and technological advancements.
Thus, while the tax policy might create a favorable climate for XRP, investors should exercise caution and conduct in-depth research before committing to any investment decisions.