- XRP jumps 20% on a daily basis, entering the overbought territory
- Speculative patterns drive the price.
XRP went wild on Tuesday. The price for the third largest cryptocurrency jumped 20% o a daily basis with the upside trend gaining traction. XRP/USD is changing hands at $0.3320 and remains one of the growth leaders on Wednesday. XRP’s total market value reached $13.1B, while the average daily trading volumes spiked to the whopping $600M, which is nearly three times as large as the day before. Note that the trading volumes jumped during early European hours and stayed elevated until the NY session close before subsiding into the Asian session on Wednesday.
Fundamentals or speculations?
As we reported on Tuesday, Ripple’s head of regulatory relations for Asia-Pacific and the Middle East Sagar Sarbhai suggested that the company’s liquidity solution xRapid was going to go live as early as the next month. His comments caused a lot of discussions and speculations within the cryptocurrency community and sent the coin to local highs. As the price smashed important resistance level $0.30, the technical factors came into play and set off the bullish spiral.
While an upside movement is seemingly based on a solid fundamental reason, there is a vast speculative component in it. Traders are buying XRP on expectations of the upcoming xRapid launch into commercial use, which has not been officially confirmed yet. Some vague hints of the company’s official during the interview with CNBC created a lot of FOMO (an acronym for Fear of Missing out), which is not a solid basis for a long-term growth.
Apart from that, many community members are worried that the XRP’s price will follow “buy the rumor, sell the fact” pattern which will lead to the sell-off once the solution actually goes live.
XRP’s technical picture
XRP/USD tested $0.3361 high during early Asian hours before retracing to the current level of $0.3320. The coin is deeply overbought, which suggests that the downside correction is highly likely with the first aim at $0.33 handle. If it is cleared, the downside may be extended towards $0.3130 with a cluster of technically essential levels, including 38.2 Fibo retracement daily and SMA200 (4-hour chart).
XRP/USD, 4-hour chart
-636729245108006366.png)
Share
