XRP price rallied 16% less than 24 hours after news broke about the potential resolution of Ripple’s legal dispute with the US Securities and Exchange Commission (SEC). However, the cryptocurrency experienced a retracement, losing half of its gains and falling below the crucial threshold of $2.50.
XRP Rally: Driven by Spot Market Activity
The price of XRP had previously matched its all-time high of $3.40 on January 16, driven by robust spot buy volumes that facilitated a prolonged parabolic rally. A similar trend appears to be emerging in today’s XRP market.
According to data from Velo, the aggregated spot tape CVD turned positive for the first time since late January, indicating a prospective resurgence in buying pressure. This indicator, which measures the net difference between aggressive buy and sell trades across various exchanges, suggests increased buying activity as market buy trades surpass sell trades.
XRP price and aggregated spot tape data. Source: Velo.chart
A negative aggregated premium on open interest reflects ongoing resistance in the futures market against an XRP price increase, highlighting a complex interaction between bullish spot activity and bearish futures trading.
Potential for Price Surge: Testing Resistance Levels
CrediBULL Crypto, an anonymous trader, indicated that XRP could soon reach an all-time high exceeding $3.40 but may first need to retest support levels around $2 before initiating a bullish trend.
Utilizing a Power of 3 technical setup, this trader suggested that the current XRP market is in an accumulation phase, likely followed by some manipulation that could drive prices toward downside liquidity near $1.80 to $2. Furthermore, market analyst Dom posited that XRP’s all-time high volume weighted average price (VWAP) remains a critical bullish indicator, stressing the need for XRP to stabilize around the $2.50 level.
XRP analysis by Dom. Source: X.com
While immediate price direction remains uncertain, XRP’s long-term structure appears constructive, suggesting a likelihood of breaching the established extremes at $3 and $2 in the forthcoming days. From a technical standpoint, XRP may avert a dip below $2 with a bullish close above $2.65, which would indicate a positive break of structure (BOS) and potentially incite bullish sentiment among futures traders.
XRP 4-hour chart. Source: Cointelegraph/TradingView
Conversely, a close below $2.23 could negate recent bullish patterns and reignite a bearish trend. Maintaining a position above the incline support line is vital for establishing an upward trajectory in the forthcoming sessions.
Despite the promising spot market activity, XRP’s price movements continue to reflect a lack of decisive trends. The current market environment is characterized by sideways consolidation as both bullish and bearish forces contend for market control.
This article does not constitute investment advice. All financial investments carry risks, and readers are encouraged to conduct their own research prior to making investment decisions.
