Widely followed analyst Income Sharks has raised caution about the current XRP trend, laying emphasis on the OBV indicator.
His commentary highlighted that XRP still looks stronger than most major assets. Notably, XRP trades at $2.62, flipping BNB but still below Tether’s USDT. In the past seven days, XRP has outperformed all the assets in the top 10 cryptocurrency ranking by market capitalization with its nearly 10% rise, confirming the analyst’s claims.
Danger Still Looms for XRP
However, Income Sharks highlighted that XRP’s On-Balance Volume (OBV), like most other cryptocurrencies, is “flirting with danger.” This cautionary message suggests that while XRP looks strong now, this critical metric indicates danger.
For the uninitiated, the OBV uses an asset’s trading volume to project its price trajectory. Its creator, Joseph Granville, believes that when volume moves, it is a matter of time before prices follow. Hence, his indicator subtracts from and adds to the volume of previous days on a negative and positive trend, respectively, to predict where prices could likely go.
The accompanying chart further buttressed the Income Sharks’ assertions. It shows that XRP’s OBV has been trending within an ascending channel, closely mirroring XRP’s weekly chart price development.
Meanwhile, the indicator has depegged slightly of late. While prices seem to be in a recovery phase, trading volume is declining. Currently, the OBV is trading close to the lower support trendline and is at risk of a breakdown.
And as Granville’s indicator suggests, even a growing asset price on a dwindling volume is only temporary. Income Shark shares a similar sentiment, calling for caution among enthusiasts.
Technical Indicators Suggest Otherwise
Amid the cautionary call, technical analysis provides a different picture. On the daily chart, the Moving Average Convergence Divergence (MACD) indicator shows a strong bullish trend, with successive green bars. The signal line further widens from the MACD line, confirming the upward trend.
Even on the weekly chart, the strong bearish bars are beginning to slowly recede, with the MACD line looking to converge with the signal line. If this momentum continues, a golden cross could happen, confirming the bullish momentum.
Moreover, the RSI on both the daily and weekly chart trends is at 53.08 and 50.27, respectively. It trends away from the overbought territory at 70, suggesting there is still room for more upside.
Fundamentals also suggest optimistic possibilities for XRP. Specifically, Evernorth just stacked 388.7 million XRP, with ETF prospects also fueling bullish sentiments.
DisClamier: 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 opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
