XRP Price Surges Above $2.00 Amid Shifting Market Focus
XRP is experiencing a surge, extending its gains above $2.00. The market’s attention has shifted from Middle East tensions to Federal Reserve Chair Jerome Powell’s statements.
- Powell’s Stance: Powell suggests that interest rate cuts may be delayed. He believes that tariffs imposed by the U.S. could increase prices while slowing economic activity.
- Technical Outlook: XRP is aiming for a technical breakout towards $3.00, supported by a robust derivatives market.
Ripple (XRP) maintains a bullish outlook after a macroeconomics-driven dip to $1.90 on Sunday. It’s currently trading around $2.17 on Tuesday. A breakout towards $2.50 seems likely if the sentiment-backed recovery continues, especially with easing geopolitical tensions following a ceasefire agreement between Israel and Iran.
Jerome Powell Signals Patience on Interest Rate Cuts
Federal Reserve Chair Jerome Powell indicated that the Fed is in no rush to cut interest rates. In prepared remarks before the House Financial Services Committee, Powell stated that “tariff increases this year will likely raise prices and weigh on economic activity.”
Despite pressure from former U.S. President Donald Trump for interest rate cuts, Powell has maintained that the central bank needs more time to assess the impact of tariffs on inflation.
“At the moment, we are well-positioned to wait to learn more about the likely path of the economy before considering any adjustments to our policy stance,” Powell added.
XRP’s recovery from the $1.90 support level can be attributed to a renewed risk-on sentiment as geopolitical tensions ease.
Following the weekend sell-off, which triggered massive liquidations, Open Interest (OI) increased by nearly 5% to $3.74 billion. A subsequent increase in trading volume of over 10% to approximately $9.5 billion indicates a significant rise in market activity.
Short liquidations, valued at around $9.3 million in the last 24 hours, surpassed longs by $3.5 million, suggesting a short squeeze recovery. Traders on Binance show a strong bullish bias, as indicated by a long-short ratio of 2.3829.
Technical Analysis: XRP’s Potential for Further Gains
XRP’s price remains significantly above key weekly moving averages, including the 50-week EMA at $1.82, the 100-week EMA at $1.38, and the 200-week EMA at $1.01. This technical positioning reinforces the bullish structure, despite extended consolidation between the April support at $1.61 and the May peak of $2.65.
Consistent gains beyond the descending trendline resistance would tighten the bullish grip. The Relative Strength Index (RSI) reversing above the midline signals stable bullish momentum.
Beyond the trendline resistance, key levels of interest for traders are the areas of seller congestion at $2.50, which were tested in May.
However, the Moving Average Convergence Divergence (MACD) indicator has maintained a sell signal since early March, when the blue MACD line crossed below the red signal line. This bearish outlook, combined with red histogram bars extending below the zero line, encourages participants to reduce their XRP exposure, potentially limiting the recovery as headwinds intensify.
Still, traders should pay attention to the MACD indicator, particularly for a buy signal. Such a signal would occur when the blue MACD line crosses above the red signal line, prompting traders to buy XRP and anticipate a larger price breakout.
Cryptocurrency Metrics FAQs
What determines the total supply of a cryptocurrency?
The developer or creator of each cryptocurrency decides the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted through mining, staking, or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its creation, a total of 19,445,656 BTC have been minted, which is the circulating supply of Bitcoin. On the other hand, the circulating supply can also decrease through actions such as token burning or mistakenly sending assets to addresses of other incompatible blockchains.
How is market capitalization calculated?
Market capitalization is the result of multiplying the circulating supply of a given asset by its current market value. In the case of Bitcoin, the market capitalization in early August 2023 exceeds $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the price of Bitcoin, which is around $29,600.
What is trading volume?
Trading volume refers to the total number of tokens of a specific asset that have been traded or exchanged between buyers and sellers within a set trading schedule, for example, 24 hours. Used to gauge market sentiment, this metric combines all volumes from centralized and decentralized exchanges. Increased trading volume often denotes demand for a particular asset, as more people are buying and selling the cryptocurrency.
What is the funding rate?
The funding rate is a concept designed to encourage traders to take positions and ensure that perpetual contract prices match those in spot markets. It defines a mechanism for exchanges to ensure that future prices and periodic price payments converge regularly. When the funding rate is positive, the price of the perpetual contract is higher than the market price. This means that traders who are bullish and have opened long positions pay traders who are in short positions. Conversely, a negative funding rate means that perpetual contract prices are lower than the reference price, so traders with short positions pay traders who have opened long positions.
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