Ripple's XRP has maintained a steady upward trend over the past week. It is currently trading at a two-month high of $0.64, having recorded a 19% increase over the past week.
BeInCrypto's assessment of XRP's setup indicates that it is currently eyeing a potential return to the yearly high of $0.74. How soon will this become a reality?
Ripple's owner bets on a rally
The decrease in selling pressure for XRP, evidenced by its negative exchange flow volume, suggests a continued upward trend. Negative exchange flow volume for an asset indicates that more assets are being transferred out of exchanges into wallets. According to Santiment data, 39 million XRP tokens have been removed from exchanges as of Tuesday.
This is a bullish signal because when more assets are being removed from exchanges, there is less supply available for immediate sale. This can reduce selling pressure and push prices higher.
XRP exchange flow volume. Source: Santiment
The increase in its open interest also accompanies the rising price of XRP. As of the time of writing, this figure stands at $989 million, up 13% in the past 24 hours.
Open interest measures the total count of open or unsettled contracts (futures or options) in the market. When both open interest and an asset’s price increase together, it indicates fresh liquidity entering the market. This signals a bullish outlook and highlights the potential for a continued rally.
XRP Open Interest. Source: Coinglass
Moreover, XRP’s funding rate has remained positive, indicating that its holders are betting on a further price rally. Per Santiment’s data, this currently stands at 0.047%.
The funding rate is a mechanism used in the futures market to ensure that the price of perpetual contracts remains close to the spot price of the underlying asset. When it is positive in a bullish phase, many traders are taking long positions, betting that the asset's price will continue to rise. This situation indicates that bullish sentiment is dominating the market.
XRP funding rate. Source: Santiment
XRP price prediction: Levels to watch
XRP is currently trading at $0.64. If the upward momentum continues and demand for XRP continues to rise, its price may soon surpass the important long-term resistance level at $0.66. This level has proven difficult to break, with XRP unable to surpass it twice since July.
A successful breakout and subsequent retest of this resistance level will pave the way for XRP to target the yearly high of $0.74.
XRP price analysis. Source: TradingView
However, if bullish pressure weakens, XRP's price may correct sharply below $0.60, invalidating the bullish forecast above.
#MarketDownturn #write2win #btc #bnb #xrp $XRP
