XRP Traders Seek $0.66 Target Despite Bearish Market Signals
Ripple's XRP value has fallen by 17% over the past week, driven by the broader market decline and also impacted by the US Securities and Exchange Commission's (SEC) decision to file an appeal against Ripple.
Although the buying pressure has weakened significantly over the past few days, traders in the Ripple derivatives market remain bullish. This analysis explores whether these traders’ bets will pay off in the near term.
Long-Term Ripple Traders Double Down on Bets
Despite the broader market decline and the ongoing legal battle between the SEC and Ripple, Ripple derivatives traders are maintaining a bullish outlook. Long positions continue to dominate, reflecting investor optimism about Ripple’s price potential.
This sentiment is supported by the coin’s funding rate, which has remained consistently positive. Currently, the funding rate is 0.004%, indicating continued confidence in Ripple’s future growth.
A positive funding rate indicates a higher demand for long positions than short positions in the market. This occurs when traders are optimistic about future price increases of an asset and as a result, are willing to pay a premium to maintain their long positions.
However, spot Ripple traders do not share this sentiment. They continue to sell their holdings amid fears of a significant price drop once the SEC appeal hearing begins. Chaikin’s negative money flow (CMF) confirms the growing selling pressure.
As of writing, Ripple’s CMF is below the zero line at -0.03. This indicator measures the flow of money into and out of the asset. When its value is below zero, selling pressure is high as traders remove liquidity from the market to prevent further investment losses.
XRP Price Prediction: The Coin is Trading Below Major Moving Averages
Ripple (XRP) is currently trading below its 20-day exponential moving average (EMA) and its 50-day simple moving average (SMA). The 20-day EMA is a short-term indicator that quickly responds to price changes by calculating the average closing price of an asset over the past 20 days. In contrast, the 50-day SMA provides a longer-term perspective by tracking the average closing price over 50 days.
These moving averages are key indicators for traders, often indicating support and resistance levels. When an asset’s price drops below the 20-day EMA, it signals a potential shift in momentum, which could lead to further declines. A drop below the 50-day SMA typically confirms a downtrend.
Ripple (XRP) is facing a potential 13% decline, which could take it down to $0.46 if it continues to move away from these crucial averages. However, if the spot market conditions turn positive and demand increases, Ripple prices could surge by 25%, pushing it to $0.66.