Key takeaways
Should XRP Bulls Expect Bullish Performance This Week?
Yes, the breakout of local resistance at $2.55, rising open interest and taker buying volume showed short-term bullish sentiment.
How far can the current rally go?
The next targets would be $3.1 and $3.4, but caution is advised. XRP is yet to regain the resistance levels of $2.64 and $2.77.
Ripple (XRP) is up 11.4% in four days. One of the reasons behind this movement was the accumulation of whales. The break of the technical resistance of $2.5 influenced the short-term sentiment in a bullish manner.
Source: XRP/USDT on TradingView
In a recent report, AMBCrypto noted that the $2.5 to $2.77 range was a key resistance zone for the bulls to overcome. At the time of writing, the local high of $2.64 was in question.
If breached, the likelihood of a rally beyond $2.77 would increase.
This week’s XRP price target would be $3. Bitcoin (BTC) surpassing $112,000 at the time of writing would help make sentiment bullish in the near term.
XRP Open Interest Hits May Low
Source: CryptoQuant
In an article on CryptoQuant Insights, analyst 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 October 10 crypto crash wiped out OI hard across the entire market. This deleveraging event accelerated the repricing and cleaned up the derivatives structure.
The current setup resembles conditions often seen at the start of a new trend phase, the analyst argued.
An OI recovery alongside strong spot demand would allow XRP to reach the $3 supply zone. Continued demand and momentum could push prices to $4.5, according to the analyst.
Source: CryptoQuant
The buy/sell taker ratio has recently shifted in favor of buyers. This has happened several times since May and usually occurs during a strong uptrend.
Since August, price retracements to the $2.8-$3 demand zone have been met with increased buy orders, indicating the expectation of a bullish reaction from the support zone.
The increase in taker buying volume as XRP breaks above local resistance at $2.55 was a bullish development. Open interest increased from $550 million to $590 million in 24 hours, according to CryptoQuant data.
XRP bulls should be careful not to get carried away by these developments. Although positive, there were significant obstacles above. The one-day time frame structure remained bearish.
The supply zone between $2.8 and $3 would be key in deciding the direction of the next impulse move.
