Key Takeaways
Should XRP bulls expect a bullish performance this week?
Yes, the breakout past the local resistance at $2.55, the rising Open Interest, and Taker Buy Volume showed short-term bullish sentiment.
How high can the current rally go?
The next targets would be $3.1 and $3.4- but caution is warranted. XRP was yet to recapture the $2.64 and $2.77 resistance levels.
Ripple [XRP] has rallied 11.4% in four days. One of the reasons spurring this move was whale accumulation. The breach of the technical $2.5 resistance swayed the short-term sentiment bullishly.
Source: XRP/USDT on TradingView
In a recent report, AMBCrypto noted that the $2.5-$2.77 was a key resistance zone for the bulls to overcome. At the time of writing, the local swing high at $2.64 was being challenged.
If breached, the likelihood of a rally beyond $2.77 would increase.
This week’s XRP price target would become $3. Bitcoin’s [BTC] move past $112k at the time of writing would help turn sentiment bullish in the short-term.
XRP Open Interest reaches May lows
Source: CryptoQuant
In a post on CryptoQuant Insights, analyst PelinayPA revealed how the Open Interest trends could set the stage for an XRP rally. The Open Interest was just below $550 million, and at the same levels it had been in May.
The crypto crash on the 10th of October wiped out OI hard, across the market. This deleveraging event has accelerated the price reset and cleaned out the derivatives structure.
The current setup resembled conditions often seen at the beginning of a new trending phase, the analyst argued.
A recovery in the OI alongside strong spot demand would enable an XRP target to the $3 supply zone. Continued demand and momentum could push prices to $4.5, according to the analyst.
Source: CryptoQuant
The taker buy/sell ratio swung in favor of the buyers recently. This has happened a handful of times since May, and usually comes during a strong uptrend.
Since August, price retracements into the $2.8-$3 demand zone have been met with heightened taker buy orders, indicating expectations of a bullish reaction from the support zone.
The increased taker buy volume as XRP races past the local resistance at $2.55 was a bullish development. The Open Interest has climbed from $550 million to $590 million within 24 hours, CryptoQuant data showed.
XRP bulls must take care not to get swept away by these developments. While positive, there were substantial obstacles overhead. The 1-day timeframe’s structure remained bearish.
The $2.8-$3 supply zone would be key to deciding the next impulse move’s direction.
Next: Ethereum supply dries up on exchanges – How this points to a breakout
