Ripple's XRP digital coin records an 'infrequent' MVRV positive crossover, sparking speculation over a potential price surge towards $5.
In a recent development, the third largest cryptocurrency by market capitalization, XRP, has just flashed an ultra-rare golden cross on the Market Value to Realized Value (MVRV) ratio. This bullish signal, which has historically been a powerful indicator for XRP, suggests potential price surges in the near future.
Denys Serhiichuk wrote an article titled "XRP Ignites 'Ultra Rare' MVRV Golden Cross, Is $5 Rally Next?" The MVRV ratio takes the ratio between market cap and realized value and plots it over time. When the long-term MVRV ratio (365-day) crosses above the short-term MVRV (30-day), it signifies improved profitability for long-term holders and potential bullish momentum.
Crypto analyst Ali Martinez highlighted the significance of this bullish signal. In the past, the MVRV golden cross has been followed by significant price increases. For instance, the last golden cross in November 2020 was followed by a 630% price surge, where XRP rose from around $0.34 to over $2, breaking important psychological price levels. Another golden cross instance occurred in early July 2021, after which XRP experienced a 54% increase, reaching approximately $3.66 from consolidation levels around $2.40–$2.75.
The current positive funding rate in XRP suggests heavy long positioning, which could raise liquidation risk if the price turns lower. If history repeats, XRP could potentially rise to $24 (630% increase) or $5.11 (54% increase) from its current price of $3.32. However, it's important to note that exact future returns are uncertain, and the timing of rallies is not guaranteed.
On Friday, XRP reached $3.38, and XRP futures activity surged with a 208% increase in 24-hour volume to $12.4 billion, overtaking Solana. Open interest in XRP futures also skyrocketed 15% to $5.9 billion, according to Glassnode. This surge in XRP futures activity could indicate increased investor interest and potential bullish sentiment.
Bulls are attempting to push the XRP price to $3.66, but bears are expected to mount a strong defense at this level. If the price turns lower, the XRP price may seek to flip $3 into support. In the event of selling pressure, the $2.96 support would come into view next, followed by the 50-day Simple Moving Average (SMA) at $2.76.
The positive sentiment around XRP was also fueled by the end of the appeals in the XRP lawsuit between the Securities and Exchange Commission and Ripple Labs. XRP saw a sharp surge in Thursday's session following this development.
In summary, the MVRV golden cross signal in XRP is a key metric for traders and investors analyzing XRP’s price potential. While the exact future returns are uncertain, the historical performance of XRP after an MVRV golden cross signal shows that past occurrences have been followed by significant price increases, notably a 630% rally and a smaller but still substantial 54% rally. This makes it a significant event for the XRP market.
[1] Serhiichuk, D. (2021). XRP Ignites 'Ultra Rare' MVRV Golden Cross, Is $5 Rally Next?. [Online]. Available: https://www.newsbtc.com/2021/10/26/xrp-ignites-ultra-rare-mvrv-golden-cross-is-5-rally-next/
[2] Martinez, A. (2021). XRP Price Prediction: Why XRP Could Rally to $5.11 or Drop to $2.96. [Online]. Available: https://www.newsbtc.com/2021/10/26/xrp-price-prediction-why-xrp-could-rally-to-5-11-or-drop-to-2-96/
[3] Glassnode (2021). XRP Futures Open Interest Surges 15% to $5.9 Billion as XRP Price Rallies to $3.38. [Online]. Available: https://www.glassnode.com/research/2021-10-29-xrp-futures-open-interest-surges-15-to-5-9-billion-as-xrp-price-rallies-to-3-38/
[4] CoinDesk (2021). XRP Price Analysis: 208% Surge in 24-Hour Volume as XRP Futures Activity Overtakes Solana. [Online]. Available: https://www.coindesk.com/markets/2021/10/29/xrp-price-analysis-208-surge-in-24-hour-volume-as-xrp-futures-activity-overtakes-solana/
- Denys Serhiichuk's article suggests that the recent MVRV golden cross in XRP could lead to a potential $5 rally, given its historical significant price increases following this signal.
- Crypto analyst Ali Martinez notes that previous instances of the MVRV golden cross in XRP have been followed by notable price surges, with a 630% increase observed in one instance and a 54% increase in another.
- The surge in XRP futures activity, as evidenced by a 208% increase in 24-hour volume to $12.4 billion, and an 15% jump in open interest to $5.9 billion, could indicate increased investor interest and potential bullish sentiment.
- While the exact future returns for XRP remain uncertain, the current positive funding rate, the end of the XRP lawsuit appeals, and the potential bullish signals from the MVRV golden cross make it a significant event for the XRP market, as traditionally, past occurrences have been followed by significant price increases.
