A mix of on-chain, fundamental and technical indicators point to a massive XRP rally. However, altcoin investors continue to hold more and more XRP.
Data points to XRP rally amid stagnant altcoin market
Cryptocurrency investors are hopeful that Ripple will win the SEC lawsuit. XRP price has made significant gains in the past month as the legal process has turned in favor of Ripple. For example, it rose 25% thirty days after the SEC filed an immediate ruling on whether XRP sales violated securities laws. By contrast, Bitcoin and Ethereum fell 4% and 11%, respectively, over the same period.
Now, a number of indicators based on on-chain techniques hint that XRP may continue its uptrend as we enter 2023.
XRP price “bullish pennant”
Bullish pennants are bullish continuation patterns that are formed when price consolidates in a triangle-like range after a strong upward move. In other words, it dissolves after the price breaks in the direction of the previous uptrend. On the daily chart, XRP has been trending within a similar technical structure since late September as shown below. He tried to rise above the pennant twice, though he failed at this time. It is now looking at another breakout in the coming days.
Theoretically, a bull pennant increases the price by the size of the previous uptrend. Therefore, XRP breaking the bull pennant pushes the price towards $0.63 in Q4 2022. This scenario would mean a roughly 35% price rally.
Altcoin whales attract massive XRP from exchanges
The technical setup of XRP takes more cues from on-chain data. This shows that the accumulation continues. According to current Santiment data, the average purchase age of XRP has been rising since September. The metric theoretically shows that XRP investors are increasingly holding the tokens.
Additionally, data tracker Whale Alert detected millions of dollars worth of XRP withdrawn from Bitstamp, Bitso, and other exchanges. As a result, the potentially sellable supply on exchanges is dwindling. Notably, investors have moved $126 million worth of XRP from exchanges to anonymous wallets since October 14. By comparison, $78.99 million worth of XRP flowed into these exchanges.
🚨 🚨 🚨 65,200,000 #XRP (31,260,398 USD) transferred from #Bitso to unknown wallethttps://t.co/uZcv8p7bcD
— Whale Alert (@whale_alert) October 13, 2022
legal process
The root of all of XRP’s rise over the past few months is Ripple’s potential to win against the SEC. One of Ripple’s key arguments is a speech by former SEC director William Hinman at the Yahoo Finance All Markets Summit in 2018. Hinman said that Ethereum is not a security, despite holding an ICO round to raise funds.
Ripple’s defense is that the SEC should treat XRP like Ether. Also, many believe the argument will guarantee a profit for the company.
