XRP’s Price Surge Appears Unlikely – But Here’s Why Holding Might Be Beneficial
After reaching a peak of $3.40, XRP has experienced a significant 27% decline in less than a month, although the Relative Strength Index (RSI) did not indicate an ‘extreme’ level of overbought conditions.
Evidently, substantial profits were achieved during this period, leading to the exit of less resilient investors as the market became more volatile, resulting in a mismatch between supply and demand.
Currently, XRP outflows have risen to 123 million as the price dropped to $2.30, marking a 26% decrease within a week. Could this signal the beginning of a new market cycle, or is it simply another deceptive bullish trend?
Possibility for Investment
Traditionally, during Bitcoin consolidation phases, traders often explore altcoins as a means of managing risks or securing rapid profits.
The XRP/BTC pairing appears to be following this pattern, as it has shown an upward trend over the last three days, revitalizing from a similar support level that previously propelled XRP to $3.40.
At the present moment, XRP is outperforming Bitcoin by delivering triple the returns, prompting more than $4 million in short positions liquidation, while Open Interest (OI) has increased by 1.4%.
The dominance of perpetual traders is resurging, with a surge in buy orders evident.
Considering the capital shift from Bitcoin, growing retail interest, and escalating involvement of Futures traders, a push towards $3.40, twice its current value, does not seem implausible.
However, with historical resistance at $2.50 posing a significant challenge and market instability looming, the prospect of a 27% surge may be overly ambitious, unless XRP is prepared to defy expectations.
Assessment of XRP’s Fundamental Factors
The cryptocurrency market cap has risen by 1.57% recently, signaling fresh capital influx, though high-cap assets are still distant from their previous peaks.
Many are struggling to reclaim crucial psychological thresholds, awaiting a notable catalyst to reignite positive momentum.
Yet, amidst prevailing macroeconomic concerns, the allure of large-cap cryptocurrencies, characterized by their “high risk, high reward” nature, seems to be waning – placing pressure on XRP. HODLing is losing its appeal as investors chase immediate returns.
In the present scenario, short-term buzz is steering market dynamics, while significant holders continue to offload their assets, diminishing the likelihood of a sustained upward momentum.
Nevertheless, with the rebound of the XRP/BTC pair, a period of consolidation below $2.50 appears probable in the short run.
Unless major holders shift towards accumulation or the broader market witnesses a substantial resurgence, a 27% leap seems unlikely at the moment. However, with a market struggle unfolding, XRP could be gearing up for its next breakthrough, rendering HODLing a potentially rewarding strategy.