The digital asset XRP witnessed an impressive surge of 49.2%, moving from $0.496 on the 4th of November to a high of $0.74 on the 12th of November. An earlier analysis had accurately predicted a symmetrical triangle formation and an imminent breakout, both of which have materialized.
Currently, XRP is testing the former local resistance levels at $0.62-$0.644 as a potential support zone after being rejected at $0.7. The resilience shown in defending this level is noteworthy, but the setback at $0.7 remains a point of concern. Can the bullish momentum be sustained?
XRP Price Projection: Positive Signs from Key Indicators
On the daily chart, a bullish market structure emerged following the breach of the $0.566 lower high on the 10th of November. Market analysts anticipate the previous local highs around $0.65, observed between July and September, to serve as a significant demand area for XRP.
Despite the recent rejection at $0.74, the Relative Strength Index (RSI) remains at 70, indicating robust bullish sentiment in the market. Additionally, the Chaikin Money Flow (CMF) stands at +0.25, suggesting substantial capital influx and a strong buying interest, particularly evident during the attempt to break out of the current trading range.
The uptick in trading volume during the move past $0.65 further bolsters the positive outlook. Hence, a retest of the $0.62 support level could present a favorable buying opportunity for investors.
Easing Short-Term Sentiment
The funding rate peaked around +0.04, alongside a surge in Open Interest to $933 million, indicating heightened optimism among traders. Concurrently, the stagnant spot Congestion Volume Tracker (CVT) witnessed a revival, signaling renewed market activity.
However, recent data suggests a decline in the funding rate and Open Interest, hinting at a potential slowdown in bullish sentiment. This development indicates a probable consolidation phase for XRP before initiating its next significant price swing.
In the period from 2019 through November 2020, XRP lingered around the $0.3 mark before experiencing a noteworthy surge to $0.78 by the end of November, establishing a broad range between $0.23 and $0.62.
A similar pattern was observed when Bitcoin began consolidating around $60k in April 2021, triggering a 217% rally for XRP beyond the range boundaries.
Another comparable cycle is unfolding now as XRP retraces around the $0.7-$0.8 region. A breakthrough above this range, potentially coupled with Bitcoin’s stabilization near its peak, could pave the way for substantial gains for XRP investors in the forthcoming months, possibly heralding the onset of an upbeat altcoin season.
Disclaimer: The views expressed do not constitute financial advice or recommendations; they are solely the author’s interpretation of the market analysis