XRP to rally? What to expect from Ripple

XRPLedger’s native token (XRP) surged 12% on November 29 as the altcoin held steady above $1.7300, growing alongside Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE) and other leading cryptocurrencies.

XRP on-chain indicators signal price growth

XRP traders increased their on-chain activity between November 16 and 29, and Santiment recorded several increases in the active address metric. The spikes represent the increase in activity, accompanied by an increase in transaction volume across exchange platforms.

The network’s realized profit/loss metric, used to identify the net profit/loss of all tokens traded on a given day, shows that XRP traders have been trading profitably since November 4th. Positive spikes above the neutral line indicate trader’s profit taking.

Typically, large positive spikes are associated with the likelihood of higher selling pressure on XRP; traders need to keep an eye on this metric for signs of a trend reversal.

The ratio of daily on-chain transaction volume in profit to loss is 6.73, which means that profitable transactions are dominant when XRP prices rise.

The on-chain metrics support a bullish thesis for XRP price along with technical and other indicators.

XRP eyes retest of April 2021 peak

Technical indicators show the likelihood of an extended price rally and a retest of $1.9669, the April 2021 high for the altcoin – a 12.85% increase from current levels. A successful break past this level can erase the losses for traders over the past three years.

The relative strength index reads 88, which means that XRP is overvalued. While this is typically considered a sell signal and may indicate an impending correction in XRP, the moving average convergence divergence (MACD) indicator signals further gains are likely.

Green histogram bars above the neutral line support a thesis of XRP price rise.

The $3 target is a psychologically important level for XRP; in January 2018, the altcoin hit an all-time high of $3. The altcoin has not yet recovered the level of the past six years.

XRP could find support between $1.2643 and $1.4033 in the imbalance zone. A correction could send the altcoin to this support zone before further correction. Once the intraday gap is filled, XRP may resume its climb towards the April 2021 peak of $1.9669.

XRP derivatives traders are turning bullish

Coinglass data shows that XRP derivatives traders on Binance and OKX are bullish on the altcoin. There is a likelihood of a rally in the spot market, as derivatives traders’ long/short ratio crosses 1 on major exchanges.

Open interest in XRP futures passed $2.41 billion on November 29. An increase in open interest is a sign of a higher relevance of the token and its increasing demand among market participants.

Strategic considerations

XRP’s three-month correlation with Bitcoin is 0.82, according to Macroaxis.com. This metric shows that a significant market movement in Bitcoin can affect the XRP price.

Bitcoin started its recovery after the initial pull to the $90,700 level on Tuesday. If BTC registers a major drop in its price in the coming weeks, the XRP price trend could be adversely affected.

Other market movements for XRP are the US Securities and Exchange Commission’s lawsuit against Ripple and progress in regulatory clarity on crypto in the States.