XRP Surges 13% in 24 Hours Alongside Broader Cryptocurrency Market
XRP has experienced a remarkable surge of 13% in the past 24 hours, bouncing back in sync with the broader cryptocurrency market following a brief period of decline. This resurgence follows a dip in major cryptocurrencies to multi-month lows, providing investors with a momentary breath of relief.
Despite the impressive double-digit price hike, both on-chain data and technical analysis suggest that this recent surge in XRP may not be sustainable for long.
XRP's Price Soars Amid Market Recovery
XRP's price has skyrocketed by 13% over the last day, aligning with the overall recovery trend in the cryptocurrency market after facing some setbacks. The temporary downturn was triggered by concerns surrounding Donald Trump's tariffs on Canada, Mexico, and China, which were initially announced on February 1. However, with the recent decision to postpone the 25% tariffs on Canada and Mexico for 30 days, investor sentiment has improved, leading to a renewed interest in accumulating assets.
Despite this optimistic turn of events, there are indications that the current rally in XRP may be short-lived. The data suggests that the surge is not being predominantly driven by strong demand for the altcoin itself, which raises doubts about its ability to sustain its current upward momentum.
One concerning metric is the significant drop in XRP's trading volume over the past day, amounting to $22.39 billion currently, reflecting a 22% decrease within that period.
The Decline in XRP's Trading Volume. Source: Santiment
When a coin's price surges while its trading volume diminishes, it typically points to a lack of solid buying momentum, indicating that fewer traders are actively pushing the price up. This imbalance in demand could jeopardize the stability of the rally and heighten the risk of a potential price reversal.
Additionally, the negative Balance of Power (BoP) for XRP underscores the prevailing bearish sentiment. The current BoP stands at -0.57, revealing a persistent bias towards bearish activity surrounding XRP despite its recent price upswing.
Negative Balance of Power Signal for XRP. Source: TradingView
The BoP indicator gauges the tug-of-war between buyers and sellers by analyzing price movements within a specified time frame. A negative BoP, as observed with XRP, signifies that selling pressure outweighs buying interest, suggesting a bearish trend and an increased likelihood of a shift in market direction.
What Lies Ahead for XRP's Price?
As of the latest data, XRP is trading at $2.57, marking an impressive 45% surge from Monday's intraday low of $1.77.
Once the general market momentum subsides, XRP might relinquish some of its recent gains if demand fails to pick up. In such a scenario, the price could retreat to $2.13.
If the support at this level is breached by the bears, the price of XRP could potentially drop below the $2 mark, settling around $1.48, a level last seen back in November.
Price Analysis for XRP. Source: TradingView
Conversely, a resurgence in demand for XRP could disrupt this bearish narrative. In a bullish scenario, the price of the token might push higher towards $2.94, presenting a more optimistic outlook for XRP investors.