Payments-focused cryptocurrency to the token experiencing record activity.
The cryptocurrency’s price surged 50% to seven-year highs above $3 this month, extending last quarter’s 240% rally, according to data source CoinDesk. Prices have increased by 30% in the last seven days alone, bringing the market capitalization to $176.75 billion, the third highest ahead of stablecoin Tether.
According to a popular market analysis tool called relative strength index (RSI), XRP is experiencing the fastest rally seen since the altcoin boom of January 2018. The metric oscillates between 0 and 100, measuring speed and evolution of price movement over specific periods, usually 14 days or 12 months.
XRP’s 14-month RSI rose to 92, the highest level since October 2017, indicating that the momentum seen over the past 12 months is the strongest in seven years.
Novice traders will quickly notice that RSI values above 70 indicate overbought conditions and the potential for respite or correction. However, this is not necessarily the case, as the RSI simply measures the speed of price changes over a period of time.
Indicators may continue to show so-called overbought values for longer than the bears can remain solvent. As the law of motion states: an object in motion will remain in motion unless an external force acts on it.
“Crypto continues to recover after Monday’s drop, with BTC closing in on the $100,000 mark. The broader market is rebounding, with altcoins like XRP and XLM performing well. XRP regained 3rd place among cryptocurrencies and surpassed BlackRock’s market capitalization,” said Diego Cardenas, OTC trader at digital asset platform Abra, in a note to CoinDesk.
“This increase is due to a growing number of partnerships, the launch of Ripple’s RLUSD stablecoin, and speculation about a potential XRP spot ETF,” Cardenas added.
Currently, XRP-specific factors combined with broader crypto market dynamics support the current bullish momentum.
Take the example of transaction volumes. The spot market amount tripled to over $23 billion in the last 24 hours, confirming rising prices. At the same time, derivatives volumes more than doubled to $34 billion, according to data source Coingecko and Coin Glass.
XRP perpetual futures open interest hit an all-time high of 2.34 billion XRP, with funding rates representing the cost of holding leveraged bets hovering around 13%. This is well below the overheated 100% in early December, which signaled excessive bullish leverage. In other words, the XRP market is much healthier and supports continued price gains.
Meanwhile, Crypto market leader Bitcoin surpassed $100,000, welcoming CORE’s slowing inflation in the United States. The strength of Bitcoin often translates into increased risk-taking in the broader Crypto market.
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