XRP News Today: XRP Surges Over 7% in 24 Hours as Bull Rally Strengthens

With a strong surge witnessed during the past day, analysts are worried about XRP as speculative leverage is building up in the market. This is a potential warning sign as to the market may well be nearing an overbought condition.

From the recent crash that put every trader in dismay, the crypto market as a whole is seeing renewed strength. Particularly, XRP has been on a rally class of its own as it surged over 7% reaching the $2.19 mark.

In this article, we will take a look at where XRP is headed, and we will try to unravel the possible market conditions that are the reason behind XRP’s bull run trajectory.

Factors That Led To The XRP 24-Hour Rally

Special mention has to be given to the fresh introduction of XRP ETFs by Franklin Templeton and Grayscale. These two ETFs have had a significant impact on the performance of XRP in the past 24 hours.

Both XRPZ – Franklin Templeton and GXRP(Greyscale) have started their run on the NYSE(NewYork Stock Exchange). Both these products have brought with their debut, fresh capital into the market. Add to this the institutional attraction that XRP has been witnessing, and a bull run is an obvious outcome.

Technical Factors Indicating Potential Reversal

CryptoQuant community analyst Maartunn has noticed that the XRP open interest delta RSI has reached the overheated territory within this 24-hour period of XRP’s bull rally. This is an indicator that measures the open interest in the market, which gives insights into the number of open positions on all derivatives markets.

Such a high number of speculative derivative positions is a dangerous territory for XRP. Creating huge speculative long positions causes the market to be overbought, which can cause a local high with much resistance for a further bull run or even a total market reversal.

With prices vulnerable to sharp swings, liquidations may be inevitable, which can pull the price down further. With OI Delta Relative Strength Index crossing the 70 mark, the market is facing a speculative froth. Historically, such an entry into the overbought market conditions has caused bear runs for XRP.

Other Factors At Play In The XRP Market

The OI Delta RSI indications lead to the conclusion that the current rally is fueled by speculative derivatives trading rather than the active trades placed on the spot market. This price disconnect between the derivative market and the organic spot market can pose a threat to potential price hikes in the near future.

However, this could all change, or the historic pattern may break as Ripple and GTreasury have made a joint report on how digital assets are reshaping corporate treasury operations worldwide. The report reflects how the digital assets are boosting financial operations by making them faster, with more uptime and execution with lower fees.

The report by Ripple and GTreasury emphasizes how this is no longer a theoretical situation, as assets like XRP are making this a reality. This puts XRP at a favorable position among institutional investors, as XRP’s intrinsic value could gain a boost if it gets adopted as the bridge currency for global payment processing.

While the report does not explicitly promote XRP, it emphasizes how XRP is becoming a vital part of this ecosystem. If this report gains more traction, the present overbought conditions may not be strong enough to pose a resistance at the $2.19 mark.

Conclusion

XRP is definitely under pressure from the technical analysis viewpoint. However, institutional interest from new ETFs and fresh institutional adoption on the horizon can all prove to be favorable conditions for XRP’s growth in the near future.

The present price surge is, however, reliant on highly speculative and leveraged derivative positions. This is not an ideal condition for XRP’s price, as there is a disconnect between the spot market and the derivatives markets.

Here we have a battle between the fundamental developments and technical indicators. Who will win this tug of war will determine the future of XRP’s price.

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