XRP price searches for a fresh bullish catalyst to trigger a move above $1
XRP’s price booked an incredible 100% gain on the same day as the landmark ruling in the XRP securities case, but buyers are now struggling to hold on to these gains.
The price surge came after Judge Analisa Torres of the United States District Court for the Southern District of New York ordered that XRP (XRP) sales to retail investors do not qualify the token as a security in the U.S. Securities and Exchange Commission’s (SEC’s) case against Ripple.
While the trading interest in XRP is reviving, the technical and network usage data hint at a short-term pullback.
Traders flock to XRP but network growth stalls
According to CoinGlass data, the open interest volume for XRP futures contracts, which represents the total value of open bets for the asset, surged to its highest point since November 2021, reaching $1.19 billion on July 20.
XRP’s spot trading volumes topped Bitcoin (BTC) and Ether (ETH), and U.S.-based exchanges like Gemini and Coinbase relisted XRP, boosting the market’s sentiment further.
Despite these positive developments, the network’s activity has not witnessed a similar increase. The number of transactions on the XRP Ledger has remained consistent for over a year, indicating a scarcity of new entities actively participating in the network.
The XRP Ledger is a blockchain-based distributed ledger technology that was created by Ripple Labs. XRP is used as a payment token on the network and also used to secure the blockchain.
Since Ripple’s partial win in the lawsuit against the SEC, the firm has ramped up its efforts for XRP Ledger adoption, starting with participating in a $54 million investment in a metaverse project, Futureverse.
The firm will also seek to reestablish its ties with banks aligning with its original vision of facilitating low-cost global payments. These will likely promote the network growth of XRP Ledger and act as positive catalysts for the market.
XRP/USD price analysis
Technically, the XRP/USD pair shows resistance from its long-term bearish trendline since the 2018 peak. A weekly close above this level should strengthen investor sentiment and mark an end to the bearish trend.
If buyers fail to maintain the bullish momentum, XRP/USD will likely revisit support around $0.54 before making a move higher.
The XRP/BTC pair is also stuck at a long-term resistance level between 0.00002533 BTC and 0.00003341 BTC. Buyers have failed to make a move above it since 2019. Failure to build support above this level can likely cause the pair to revisit support around 0.00001555 BTC.
Related: XRP price can fall 40% by September — Fractal analysis
A correction would be considered bullish if the pair finds support at the 50-period moving average (MA) at 0.00002057 BTC or the 200-period MA at 0.00001913 BTC.
As mentioned above, the futures open interest for XRP is at a two-year peak of over $1 billion in notional value. Thus, XRP will likely exhibit significant volatility in the near term.
The funding rate for perpetual swaps, which represents the relative demand for long or short orders for the token, has trended positively since the court’s iconic ruling, suggesting that most traders added long positions, once again raising the possibility of a correction to hunt the liquidation levels for overleveraged buyers.
Given the positive regulatory development, technical progress and the popularity of the token among retail users, it is likely XRP’s long-term negative trend could end in a few weeks with the arrival of positive catalysts relating to XRP’s mainstream adoption.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.