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Disclaimer: The information presented does not constitute financial advice, investment advice, trading advice or any other form of advice and is solely the opinion of the writer
- XRP has demand, bullish structure and momentum behind it as the price rose towards the $0.55 resistance
- The move above $0.5 indicated bullish intentions, but buyers should beware of a shift in market structure on the lower futures
Digital asset data provider Kaiko noted that another $4 million was added to the Ripple [XRP] depth of the market. It rose from $8 million to $12 million in early September, which was good news for traders as it shows that large orders will not cause unnecessary volatility.
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While this is a positive development, it is unlikely to impact market sentiment in the short term. XRP was bullish but faced a higher timeframe resistance zone to the north, extending to $0.55. If the bulls can overcome this obstacle, the chances of a rally will increase.
The breakout and retest of $0.5 gives XRP bulls the confidence to pursue further gains
Source: XRP/USDT on TradingView
On September 19, XRP closed a four-hour trading session above the previous lower high at $0.5076 from September 8. As noted in a recent report, this was a crucial short-term level for the bulls as a move above meant a bullish reversal of the market structure in the fourth half.
The Relative Strength Index (RSI) showed strong upward momentum with a reading of 58, while On-Balance Volume (OBV) has moved much higher over the past week. It was unclear whether this could last as the $0.513-$0.55 region (red box) was a bearish order block on the 1-day chart.
Therefore, the chances of a bearish reversal increased when the price was within this region. Buyers can remain cautious and wait for a clear move beyond $0.55 to take a high probability long trade. In the meantime, sellers can wait for a structural shift to fall short in a shorter time frame.
Market sentiment has been in favor of buyers as demand for XRP continues
Source: Coinalyse
Over the past week, the price of XRP has surged higher. The one-hour chart of Coinalyse showed that the Open Interest (OI) also showed an upward trend, especially after September 18. The Spot Cumulative Volume Delta (CVD) also recorded big bumps that pushed it higher over the past ten days, highlighting demand in the spot market.
Realistic or not, here is the market cap of XRP in terms of BTC
A move below $0.5066 would be the first sign that a short trade was viable. Traders can also look for Bitcoin to drop below $26.6k. However, the available evidence showed that XRP would likely see more gains and that bulls would likely be rewarded for their conviction.