On March 11, Ripple‘s XRP cryptocurrency experienced a significant jump in its trading price, soaring from an opening value of $0.608 to a peak of $0.744, marking a sharp 22.37% rise within the day. However, this increase was not sustainable, and the price subsequently dropped below the $0.7 mark.
Expectations and Realities for XRP
The altcoin’s surprise rally surpassed previous expectations of hitting the $0.7 threshold, leading to a temporary boost in its value. Despite this, the excitement was short-lived as the bulls struggled to maintain the $0.7 level as a new support base. Such difficulty in sustaining the higher price echoes a similar situation from early November where a resistance at $0.7 led to a swift downturn.
Indicators of Market Momentum
Notably, the On-Balance Volume (OBV) indicator’s ascent to heights beyond July’s records and its steadiness at this elevation suggest a robust buying volume that could potentially counter bearish pressure. Although this trend may indicate a positive shift, the longevity of this momentum remains uncertain.
A downward price correction is now anticipated by market analysts, who point to the thin liquidity above the $0.7 mark as a potential catalyst for a drop to levels around $0.64 or even between $0.52 and $0.54. Liquidity is a significant factor influencing XRP’s price, and while the altcoin market showed overall strength, XRP’s performance lagged. The rise in open interest from $600 million to $830 million, along with an uplift in spot Cumulative Volume Delta (CVD), hinted at increased market activity.
However, the continuation of a downward trend in the second indicator suggests unfavorable conditions for bulls. Expert analysis implies that the surge could be speculative, driven more by futures market activities than real demand. This phenomenon could set the stage for a potential liquidity trap, leading to an anticipated retreat to the support levels of $0.64 and possibly $0.54. In conclusion, Ripple’s XRP faced a brief period of intense activity resulting in a spike and subsequent decline, with concerns over the sustainability of its demand and price level.