XRP price retreats after reaching 8-month high—here’s the catch

XRP price recently experienced a remarkable rally, surging by 40% to reach an 8-month high of $0.741.

However, emerging sell signals and shifting investor sentiment caused the token to pull back to $0.6292, suggesting the token could face challenges in maintaining its momentum.

Nevertheless, several factors, including market conditions, technical indicators, and speculative rumours offer bullish signals for the altcoin.

What drove XRP’s price rally?

XRP’s recent surge can be attributed to a combination of factors, including broader market conditions and specific developments surrounding Ripple.

Notably, XRP appeared to join the broader rally driven by political events, particularly the US presidential election.

There was speculation that Ripple’s CEO, Brad Garlinghouse, had met with Donald Trump or members of his administration to discuss a potential regulatory framework for cryptocurrencies.

Confirmed ✅ #XRP

Copy link Read 78 replies

Although Ripple has not confirmed these reports, the rumour caused a spike in investor interest, driving XRP’s price from under $0.60 to $0.741, its highest level in eight months.

This rally, which came after XRP had been underperforming compared to other major cryptocurrencies, suggests that the market was reacting to both political speculation and a renewed optimism around Ripple’s future.

What caused the XRP price to pull back?

The XRP price rally occurred alongside a decline in investor participation, as evidenced by the Daily Active Addresses Divergence, which highlights a disconnect between rising prices and falling active addresses, pointing to waning short-term enthusiasm among investors.

Such behaviour often leads to selling pressure, as investors who missed the initial surge begin to lock in profits.

Moreover, XRP’s Relative Strength Index (RSI), which measures the magnitude of recent price changes, has entered the overbought zone.

Historically, when the RSI crosses above this threshold, it often signals that the asset is due for a price correction.

This suggests that while XRP’s recent rally was impressive, its bullish momentum may be nearing exhaustion, with a pullback likely in the short term.

The market is still bullish on Ripple (XRP)

XRP’s future trajectory largely hinges on whether it can hold its recent gains and continue to draw investor interest.

The token faces a critical support level at $0.66, with further support at $0.61 and $0.56 should selling pressure intensify.

Conversely, breaking through the $0.7440 resistance level could trigger a more significant rally, potentially pushing XRP up by nearly 50% rally toward a three-year high of $1.100.

Supporting the bullish sentiment, the XRP futures open interest has grown by about 75% from $681 million to over $1.2 billion within a week.

This surge in open interest indicates a growing belief among investors that XRP may continue its upward trajectory.

Additionally, a large concentration of call options at the $0.72 strike price signals that traders are betting on further price increases, with many incentivized to defend this level as support.

XRP traders and investors will, however, need to closely monitor these evolving market conditions to gauge the sustainability of XRP’s recent bullish trend.

The post XRP price retreats after reaching 8-month high—here's the catch appeared first on Invezz