XRP, also known as Ripple (XRP), experienced a 16% rally within 24 hours following news that the legal dispute between Ripple and the US Securities and Exchange Commission (SEC) could be coming to an end. However, the cryptocurrency has since lost half of its gains, dropping below the important level of $2.50.
The rally in XRP has been primarily driven by spot trading volumes. Similar to what happened in January when XRP reached its all-time high of $3.40, the current market is witnessing a surge in spot buy volumes, indicating a sustainable upward trend. Data from Velo shows that the aggregated spot tape cumulative trade delta (CVD) has turned positive for the first time since late January.
The aggregated spot tape CVD measures the net difference between aggressive buy and sell trades across multiple exchanges. When the indicator rises above zero and turns green, it signifies growing buying pressure as market buy trades outnumber sell trades. This trend reflects persistent buyer aggression, leading to a price increase.
On the other hand, the futures market has been bidding against an XRP price rise, as indicated by the negative aggregated premium on open interest. This creates a tug-of-war between bullish spot traders and bearish futures traders.
According to CrediBULL Crypto, an anonymous crypto trader, XRP is on track to reach a new all-time high above $3.40 in the coming weeks. However, before embarking on an uptrend, the cryptocurrency may potentially retest its immediate lows around $2. This analysis is based on the Power of 3 technical setup, which suggests that XRP is currently in an accumulation range followed by a manipulation period.
Another analyst, Dom, highlights the importance of XRP stabilizing around the $2.50 level. Dom believes that XRP’s all-time high volume weighted average price (VWAP) is a bullish threshold for the cryptocurrency. To maintain a positive outlook, XRP needs to establish a bullish close above $2.65, creating a positive break of structure (BOS) that could convince futures traders to adopt a bullish stance.
However, a close below $2.23 would nullify XRP’s recent price action and reinstate the overall bearish trend. It is crucial for XRP to retain a position above the incline support (black trendline) to sustain a higher high trend in the coming days.
Despite the bullish spot activity, XRP is currently experiencing sideways consolidation, with bulls and bears locked in a battle for control. The market lacks a decisive trend shift, and investors should conduct their own research and exercise caution when making investment decisions.
In conclusion, XRP’s price rally has been driven by spot trading volumes, with indicators suggesting growing buying pressure. Analysts predict a potential retest of immediate lows before an uptrend, emphasizing the importance of key price levels for XRP’s future performance. However, market conditions remain uncertain, and investors should exercise caution and conduct thorough research before making any investment decisions.
