XRP Analysis: Long traders are targeting $0.66 despite bearish market signals. XRP’s value has dropped by 17% over the past week, driven by the broader market downturn and further impacted by the US SEC’s decision to file an appeal against Ripple.
Although buying pressure has weakened significantly over the past few days, traders in the XRP derivatives market remain optimistic. This analysis explores whether or not the bets of these traders will produce favorable results in the near term.
Despite the broader market downturn and the ongoing legal battle between the US SEC and Ripple, XRP derivatives traders maintain a bullish outlook. Long positions continue to dominate, reflecting investor optimism about XRP's price potential.
This sentiment is supported by the token's funding rate, which has consistently stayed positive. As of now, the funding rate is at 0.004%, indicating sustained confidence in XRP's future growth.
A positive funding rate suggests a higher demand for long positions than short ones in the market. It occurs when traders are optimistic about an asset’s future price increases and are willing to pay a premium to maintain their long positions.
However, XRP spot traders do not share this stance. They continue to sell their holdings amid fears of a significant price decline once the hearing of the US SEC appeal commences. The token’s negative Chaikin Money Flow (CMF) confirms the strengthening selling pressure.
XRP is currently trading below its 20-day exponential moving average (EMA) and its 50-day simple moving average (SMA). The 20-day EMA is a short-term indicator that quickly responds to price changes, while the 50-day SMA provides a longer-term perspective.
These moving averages are key indicators for traders, often marking support and resistance levels. A drop below these averages suggests a potential shift in momentum, possibly leading to further declines. XRP is facing a potential 13% decline, which could see it drop to $0.46 if it continues to distance itself from these crucial averages.
However, if sentiment in the spot market turns positive and demand rises, XRP’s price could rally by 25%, pushing it to $0.66.
