XRP Soars to Three-Month High, Driven by Regulatory Approvals and IPO Speculations
Summary:
On November 6, XRP's value surged by over 10%, hitting nearly $0.72 – a three-month peak. This is part of a larger recovery that began when investment firm Grayscale reapplied to convert its Bitcoin trust into a spot ETF with the SEC. Since then, XRP's price has increased about 45%, making it the fourth-largest cryptocurrency by market cap. The recent rise also appears to be driven by regulatory approval in Dubai's free trade zone and anticipation of Ripple's upcoming Swell conference, which may reveal the company's IPO plans. Also contributing to this growth is the accumulation behavior among XRP's wealthiest investors. However, the outlook for XRP may include a correction period with a potential drop to the $0.55 level.
Following a surge of over 10% on November 6, the value of XRP (XRP) hit near $0.72, marking a three-month high. The recent increase in XRP's value is part of a broader recovery trend kickstarted on October 19, when Grayscale, a New York-based investment firm, re-applied to transform its Bitcoin trust into a spot exchange traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC).
From that point on, XRP's price has risen by approximately 45%, replacing Cardano (ADA) as the fourth-most valuable cryptocurrency by market capitalization as of November 6. Moreover, XRP's bullish momentum has gotten a further boost following regulatory approval in Dubai International Financial Centre’s free trade zone. This means that financial enterprises in the DIFC are now authorized to transact in XRP tokens.
The boost in XRP/USD pair's value comes ahead of the anticipated Ripple's Swell conference set to take place in Dubai on November 8-9. Market gossip has it that the blockchain payment firm may disclose its Initial Public Offering (IPO) plans at the event.
In prior years, the XRP market has seen similar positive uptrends linked to the Swell event. Similarly, a boost in Ripple's value last week was likely due to its selection by the National Bank of Georgia for the development of digital lari, a Central Bank digital currency (CBDC) project.
On November 6, amidst strong accumulation behavior among its wealthiest investors, XRP experienced a price surge. Remarkably, the supply held by addresses with a balance ranging between 100,000 and 1 billion XRP tokens reached its November 2023 zenith, according to data from Santiment.
Furthermore, XRP's social dominance has reached its height since July 2023. On the other hand, XRP's rise was met with modest gains in its derivative market. For instance, the open interest (OI) of the cryptocurrency, representing the total notional value of active contracts, increased about 13.5% in the last 24 hours to $751.75 million.
In the meanwhile, XRP's OI-weighted funding rate fell to 0.01% every eight hours on November 6 compared to 0.03% a day prior. Though this represents only 0.2% weekly, indicating that long positions are covering the leverage cost, a funding rate below 1% per week is not considered expensive.
Based on these figures, it can be questioned whether the buzz around Ripple's Swell has convinced derivative traders about further XRP price increase. From a technical viewpoint, a push towards the $0.90 mark is highly likely, which is a 25% uptick from current levels. However, pushing the XRP's weekly relative strength index above 70 would put it in the overbought territory, increasing the likelihood of a correction.
A downturn in this scenario could see the digital currency reach near $0.55, a fall of 20% from current price levels. It should be noted, however, that every investment and trading move involves risk, and readers should carry out appropriate research before making any decisions.
Published At
11/6/2023 1:37:02 PM
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