- XRP recorded a huge rally as Bitcoin hit a new all-time high.
- Caution on XRP strength was warranted based on pockets of liquidity.
Ripple (XRP) bulls came to life on March 11th. They rose 22.37% in price to $0.744, opening the day at $0.608 before selling activity pushed the price back below $0.7.
The token has exceeded AMBCrypto’s expectations stated in a recent report, which predicted a rise to $0.7. More than that has been gained, but questions have also been raised about whether demand is sustainable.
Is rejection in progress now?
Source: XRP/USDT on TradingView
It broke the high of the $0.7 range on the 11th, but the bulls were unable to defend this level as support. This was similar to the price action seen in early November, when a quick rally against $0.7 resistance was followed by a quick rejection.
OBV remained at a high level after breaking through the July high, which was encouraging. A continued increase in buying volume could stem the decline, but it is unclear whether this optimistic outlook will be maintained.
Instead, now that liquidity just above $0.7 has been swept away, it could start to move south towards $0.64 or $0.52-$0.54. Prices gravitate toward liquidity, and despite strength in the altcoin market, XRP has lagged.
A surge in open interest has fueled speculative activity.
Source: Coin Analysis
As the price of XRP rose, open interest followed suit. It rose from $600 million to $830 million, and spot CVD prices also hit higher. However, the latter indicator continued its previous downward trend.
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This was bad news for the bulls. This showed that the rally was driven by the futures market and was driven by liquidity, not actual demand.
Therefore, a retracement to the $0.64 and $0.54 support levels may follow.
Disclaimer: The information presented does not constitute financial, investment, trading or any other type of advice and is solely the opinion of the author.