The price of XRP (XRP) rose more than 10% on November 6, reaching nearly $0.72, its highest level in three months.
Why is XRP price rising?
XRP’s rise on November 6 was followed by a larger rally that began on October 19, when New York investment firm Grayscale refiled its application with the U.S. Securities and Exchange Commission (SEC) to convert its Bitcoin trust into a spot ETF. It’s part of a rebound trend.
Since then, XRP’s price has risen nearly 45%, replacing Cardano (ADA) as the fourth-largest cryptocurrency by market capitalization as of November 6.
Additionally, XRP’s bullish momentum has improved after receiving regulatory approval from the Dubai International Financial Center Free Trade Zone. This means that financial institutions in DIFC can now legally conduct XRP token trading.
The rise in the XRP/USD pair also comes ahead of Ripple’s Swell conference, scheduled for November 8-9 in Dubai, amid rumors that the blockchain payments company could announce plans for an initial public offering (IPO).
This year’s SWELL could be very important. We don’t know what will be announced, but here are some possibilities:
IPO
BE License
CBDC
Stablecoin/Tokenization
New Users(!) – After a year of silence, here’s more information: #ripple It is still primarily considered a payments company.— WrathofKahneman (@WKahneman) October 27, 2023
The XRP market has seen a similar bullish response to past Swell events.
Ripple also appears to have received support from the National Bank of Georgia, which last week chose it to develop a central bank digital currency (CBDC) project, digital lari.
XRP Whale Accumulation
XRP’s price rise on November 6 also came against the backdrop of strong accumulation behavior by the wealthiest investors.
In particular, according to data resource Santiment, the supply held by addresses with balances of 100,000 to 1 billion XRP tokens reached its highest level in November 2023.
Meanwhile, XRP’s social dominance, which measures mentions on cryptocurrency-focused social media and the top 50 cryptocurrencies, rose to its highest level since July 2023.
XRP open interest rises 13.5%
XRP’s rise was accompanied by small gains in the derivatives market.
For example, the cryptocurrency’s open interest (OI), which represents the total notional amount of contracts still open, increased nearly 13.5% in the last 24 hours to $751.75 million. This is still lower than the OI of $1.19 billion following the SEC v. Ripple court ruling in July.
Meanwhile, XRP’s OI-weighted funding rate fell from 0.03% yesterday to 0.01% every 8 hours on November 6. This equates to 0.2% per share, indicating that the long position is covering the cost of leverage. However, a funding rate of less than 1% per share is not considered expensive.
Given the lack of demand for leverage through futures contracts, it is reasonable to wonder whether the hype around Ripple’s Swell has further convinced derivatives traders of XRP price upside.
Nonetheless, XRP technical analysis sees a 25% upside potential.
From a technical perspective, XRP price is well positioned for one last rally before entering a possible correction period. Therefore, bulls will target the $0.90 level by 2024.
The $0.90 target is aligned with the resistance confluence consisting of the multi-month upward trend line (purple), the multi-year downward trend line (black), and the December 2021-April 2022 resistance range (red).
Nonetheless, this potential rise towards $0.90 would push XRP’s weekly relative strength index above 70, overbought territory, increasing the risk of a correction. For example, the price of XRP fell more than 50% after RSI crossed 70 in July 2023.
The downside target for this correction scenario appears to be around $0.55, a 20% decline from current price levels. This level coincides with XRP’s resistance during the October 2022 and March-June 2023 sessions.
Related: Crypto Lawyer Says $20 Million Settlement Is A 99.9% Win For Ripple
Another reason to watch the $0.55 level is the multi-month upward trendline support for XRP/USD and the 50-week (red) and 200-week (blue) exponential moving averages (EMAs).
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.