In a remarkable turn of events, XRP has rallied to a new year-to-date high at $1.68, solidifying its position as one of the top-performing cryptocurrencies in recent times. The altcoin’s continuous formation of higher highs (HH) patterns has contributed significantly to its impressive price increase.
XRP’s On-Chain Metrics Show a Resurgence
While XRP’s price has skyrocketed by 232% over the past 30 days, its on-chain metrics have also demonstrated a positive trend. According to data from xrpscan, the number of active accounts or unique senders on the XRP network surged from 15,592 on November 1st to as high as 47,044 on November 16th.
Active Accounts on XRP Ledger Rise Dramatically
The overall average of active accounts doubled in November, increasing from approximately 12,000 to 25,000 this month. The number of new accounts activated on the XRP ledger also registered a significant spike in November, indicating an influx of new users on the network.
Ripple’s Strategic Partnerships Boost Bullish Sentiment
The bullish sentiment surrounding XRP has been further bolstered by Ripple’s strategic partnership with Archax to launch a tokenized money market fund on the XRP ledger. Additionally, Bitwise, a crypto index fund manager, announced on November 7th that it would rebrand its European XRP ETP, providing European investors with XRP exposure through a physically backed product.
XRP Eyes $2 but Overbought Conditions Point to ‘Distribution’
XRP’s recent breakout occurred after the price exhibited a bullish breakout from a bull flag pattern. The formation of a new higher high indicates a continuation of the bullish trend in the chart, opening up possibilities for further upside. However, Mikybull, an independent crypto analyst, has noted that overbought conditions point to a potential ‘distribution’ phase.
Fibonacci Extension Rule Suggests $1.95 – $2.05 Target
Based on the Fibonacci extension rule from its trend swing low at $1, XRP’s immediate target lies between $1.95 and $2.05, comprising its previous bull-runs market top at $1.97, which will act as overhead resistance.
$10 Target Possible but Mid-Term and Long-Term Charts Show Bearish Divergences
Mikybull has also mentioned the possibility of a $2 target and said,’$XRP 2017 kind of rally vibes. Hit $2, experience a pullback, and then continue its vertical hated rallies to a new cycle top of probably $10.’ However, it is essential to note that mid-term and long-term charts illustrate clear bearish divergences.
Inverse Correlation Between Price and Trading Volume Indicates Distribution Phase
Another crucial analysis is that price and trading volume have shown an inverse correlation since November 16th. This indicates that XRP is experiencing a distribution phase, where the market traders are potentially looking to sell.
Trading Volumes Lowest Since Nov 10; Bearish Market Reversal Possible
The probability of a bearish market reversal increases, considering that trading volumes over the past three days were the lowest since November 10th. This suggests that the recent price surge may be followed by a correction or even a significant downturn.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views expressed in this article are for informational purposes only and do not constitute financial advice.
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