On August 25, XRP surged to a 20-day high of $0.63 but has since retracted 8% over the past three days. On-chain indicators suggest that bullish traders are preparing for a potential breakout, signaling the possibility of another upward move.
XRP Price Slides 8% Following Rejection at $0.65
Throughout the second half of August 2024, XRP has experienced a steady upward trajectory, largely driven by the favorable outcome of the Ripple vs. SEC lawsuit. However, when bulls attempted to push higher over the recent weekend, profit-taking led to a swift reversal.
The XRP/USD daily chart illustrates that XRP climbed 49% during the 20-day trading period between August 5 and August 25. Nonetheless, after failing to break through the $0.63 resistance on August 25, XRP has retraced 8%, settling at $0.60 as of August 27.
Despite this pullback, on-chain data signals that bullish traders remain optimistic.
XRP Exchange Reserves Fall Below 3 Billion Coins
XRP holders have shown a growing tendency toward long-term investments since the resolution of the Ripple vs. SEC case earlier in August. The newfound regulatory clarity appears to have bolstered investor confidence in XRP’s future prospects.
The Exchange reserves metric tracks the number of XRP coins held across recognized cryptocurrency exchanges. A decrease in exchange reserves generally indicates that investors are moving assets off exchanges into private wallets, reflecting confidence in its long-term price prospects.
The CryptoQuant chart reveals that XRP exchange deposits stood at 3.12 billion coins at the beginning of August 2024. By August 27, this figure had dropped sharply to 2.97 billion XRP, signifying a withdrawal of over 150 million XRP from trading platforms during this period.
This trend is noteworthy for two key reasons. First, it marks the lowest exchange reserve levels in over 40 days, dating back to July 12, 2024. More critically, at current prices, this withdrawal represents a reduction of approximately $88 million in XRP’s short-term market supply.
This significant drop in exchange-held XRP suggests that the asset is primed for a breakout, particularly if an anticipated Fed rate cut in September sparks a surge in demand.
XRP Price Prediction: The Path to a $0.70 Breakout
Following the recent pullback, XRP price has found itself at a crucial juncture. The Keltner Channel (KC) and Balance of Power (BOP) indicators reveal a mixed outlook for XRP yet lean towards a bullish narrative.
The Keltner Channel shows XRP price has maintained a steady climb within the upper and middle bands over the past month, indicating ongoing bullish momentum. Notably, XRP has corrected to the middle band, now serving as immediate support around $0.59.
This level could prove pivotal for the next leg up. If XRP price can bounce off this support, a run towards the $0.63 resistance level is likely. Breaching this threshold could set the stage for a rally towards the $0.70 mark, where the upper band of the Keltner Channel lies.
Meanwhile, the Balance of Power (BOP) indicator is currently at 0.12, signaling that the bulls maintain a slight upper hand despite the recent decline. This suggests that the buying pressure still outweighs selling, although the margin is narrowing. If the BOP can sustain above zero while XRP holds above $0.59, the chances of a bullish breakout increase significantly.
However, should XRP fail to defend the $0.59 support, it could test the next key support at $0.55. While the overall trend remains bullish, investors should watch these critical levels closely as the XRP price navigates towards the anticipated $0.70 breakout.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
