Key takeaways
Should XRP bulls expect bullish performance this week?
Yes, the breakout of the local resistance at $2.55, the increase in open interest and the buying volume of participants showed a short-term bullish sentiment.
How far can the current rally go?
The next targets would be $3.1 and $3.4, but caution is warranted. XRP was yet to reclaim the $2.64 and $2.77 resistance levels.
Vibe [XRP] has risen 11.4% in four days. One of the reasons that prompted this movement was the accumulation of whales. The breakout of the $2.5 technical resistance influenced short-term sentiment bullishly.
Source: XRP/USDT on TradingView
In a recent report, AMBCrypto noted that between $2.5 and $2.77 was a key resistance zone for the bulls to overcome. At the time of writing, the local high of $2.64 was being challenged.
Breaking out would increase the probability of a rally above $2.77.
This week’s XRP price target would be $3. Bitcoin [BTC] Breaking above $112,000 at the time of writing would help keep sentiment bullish in the short term.
XRP open interest hits May lows
In a post about Cryptoquantitative Perspectivesanalyst PelinayPA revealed how open interest trends could set the stage for an XRP rally. Open interest was just below $550 million and at the same levels as in May.
The cryptocurrency crash on October 10 wiped out OI across the market. This deleveraging event has accelerated price adjustment and cleaned up the derivatives structure.
The analyst argued that the current setup resembled conditions often seen at the beginning of a new trend phase.
A recovery in OI coupled with strong spot demand would allow for XRP to target in the $3 supply zone. Continued demand and momentum could push prices to $4.5, according to the analyst.
The buyers’ buy/sell ratio recently swung in favor of the buyers. This has happened several times since May and usually occurs during a strong uptrend.
Since August, price pullbacks towards the demand zone of $2.8 to $3 have been met with increased buying orders from buyers, indicating expectations of a bullish reaction from the support zone.
The increase in buying volume from buyers as XRP surpasses the local resistance of $2.55 was a bullish development. Open interest has risen from $550 million to $590 million in 24 hours, CryptoQuant data showed.
XRP bulls should be careful not to get carried away by these developments. While it was positive, there were significant obstacles. The 1-day time frame structure remained bearish.
The $2.8 to $3 supply zone would be key in deciding the direction of the next momentum move.
