Things don’t appear to be looking up for XRP. It had a near 9% rally yesterday, putting it closer to a supply zone between £0.60 – 0.63 for the third time. Despite the rally, technical indicators appear to be weak at the moment for the coin to overcome the resistance for good.
XRP is currently below the 50 and 200 day moving averages. Its trading volumes appear to be mediocre at best, and the RSI is significantly lower than it was last time around this price, implying weaker bullish momentum.
A good breakout over the £0.77 level would restore some of the coin’s lost vitality and put an end to this period of directionless movement.
On-chain indicators also point to a lack of strength. Despite the near 9% increase that XRP has shown in the last day, the adjusted price DAA divergence has shown a major sell signal, according to a Santiment model that generates buy and sell signals based on significant price divergences and the amount of daily addresses engaging with the currency.
Similarly, the Daily Active Addresses have experienced a drop in numbers from the charts, indicating low activity levels on the chain.
However, it has produced some comforting indications as well. Over the last two weeks, the coin’s social influence has increased. In the past, a gain in social dominance followed by a price rebound has usually signalled instant optimism.
Additionally, funding rates have registered positivity, implying that individuals holding long positions in XRP perpetual futures are paying to keep them – implying that some short-term bullishness may persist.
Furthermore, according to Coinglass data, approximately £2.37 million worth of shorts were liquidated during the recent 9% increase.
With the bears moving aside, XRP could experience another short-term rally.
However, based on fundamental on-chain indicators, it appears that XRP will be unable to offer good returns unless major favourable news is released.
In the short term, on the other hand, there is a nice trade opportunity. As a result, a short-term long strategy with a stringent stoploss and goal could be the best option.