Why is XRP price up today?
The price of XRP (XRP) is up, gaining over 10% on Nov. 6 reaching nearly $0.72, the highest levels in three months.
Why is XRP price up?
XRP’s gains on Nov. 6 are part of a larger rebound trend that started Oct. 19 when New York investment firm Grayscale refiled the application to convert its Bitcoin trust into a spot ETF with the U.S. Securities and Exchange Commission (SEC).
Since then, XRP’s price has gained nearly 45%, replacing Cardano (ADA) to become the fourth-largest cryptocurrency by market capitalization as of Nov. 6.
In addition, XRP’s bullish momentum has improved after winning regulatory approval in the Dubai International Financial Centre’s free trade zone. In other words, financial institutions in the DIFC can now legally carry out transactions in XRP tokens.
Furthermore, gains in the XRP/USD pair come ahead of Ripple’s Swell conference on Nov. 8-9 in Dubai — amid rumors that the blockchain payment firm may announce its Initial Public Offering (IPO) plans.
This year’s SWELL may be very significant. Don’t know what might be announced, but there are possibilities:
IPO
VARA license
CBDC
Stablecoin/tokenization
New users(!) – after a year of silence, we may gain more detail if #Ripple still considers itself primarily a payment company.— WrathofKahneman (@WKahneman) October 27, 2023
The XRP market has seen similar bullish reactions to the Swell event in the past.
Additionally, Ripple likely also received a boost last week from The National Bank of Georgia, which selected it for developing digital lari, its central bank digital currency (CBDC) project.
XRP whale accumulation
XRP’s price rally on Nov. 6 also comes on the backdrop of a strong accumulation behavior among its richest investors.
Notably, the supply held by addresses with a balance between 100,000 and 1 billion XRP tokens reached its highest level in November 2023, according to data resource Santiment.
Meanwhile, XRP’s social dominance, measuring its mentions across the crypto-oriented social media vs. top-50 cryptocurrencies, has risen to its highest levels since July 2023.
XRP open interest jumps 13.5%
XRP’s climb accompanied modest gains in its derivative market.
For instance, the cryptocurrency’s open interest (OI) — representing the aggregate notional of contracts still in play — jumped nearly 13.5% in the past 24 hours to $751.75 million. That is still lower than the $1.19 billion OI that tailed the SEC vs. Ripple court decision in July.
Meanwhile, XRP’s OI-weighted funding rate has dropped to 0.01% every eight hours on Nov. 6 versus 0.03% yesterday. That equals 0.2% per week, indicating long positions are covering the leverage cost. However, note that funding rates below 1% per week are not considered expensive.
Considering the lack of demand for leverage through futures contracts, it’s reasonable to doubt whether the hype around Ripple’s Swell has convinced derivative traders about more XRP price upside.
XRP technical analysis sees a 25% upside, nonetheless
From a technical perspective, XRP price is well-positioned for one last push upward before entering a possible correction period. Thus, the bulls will be eyeing $0.90 level into 2024.
The $0.90-target coincides with a resistance confluence comprising a multi-month ascending trendline (purple), a multi-year descending trendline (black), and the December 2021-April 2022 resistance range (red).
Nonetheless, this potential push toward $0.90 will place XRP’s weekly relative strength index above 70, an overbought zone, heightening the risk of a correction. For example, XRP’s price dropped over 50% after its RSI crossed above 70 in July 2023.
The downside target in this correction scenario appears near $0.55, down 20% from current price levels. This level coincides with XRP’s resistance during the October 2022 and March-June 2023 sessions.
Related: Crypto lawyer says $20M settlement is 99.9% win for Ripple
Another reason to watch the $0.55 level is because it’s the multi-month ascending trendline support for XRP/USD and its 50-week (red) and 200-week (blue) exponential moving averages (EMAs).
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.