- XRP investors are still at an average profit of 32% despite recent sideways price action.
- XRP's futures open interest and trading volume have been weak since October 1.
- XRP could rise to $0.5608 if it maintains bullish momentum and crosses above the 100-day and 200-day SMA.
Ripple's XRP is trading near $0.5140 on Tuesday following declines in several of its on-chain data, which indicates declining investor interest. The remittance-based token could rally toward $0.5608 after crossing above the upper boundary of a symmetrical triangle.
XRP suffers waning investor interest
XRP's on-chain data has remained fairly quiet since around October 1, when investors realized profits of over $134 million.
The most recent modest spike was in XRP's Age Consumed on October 20 after prices moved lower and investors realized losses of about $34 million. The Age Consumed metric tracks previously idle coins and spikes when these tokens move between addresses.
As a result, XRP's Market Value to Realized Value (MVRV) Ratio is 32%, indicating that all investors are making an average profit of 32%. However, the percentage of total supply in profit plunged from 90% on October 1 to 70% on Tuesday.
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XRP Key On-chain data
Meanwhile, XRP's open interest has remained below $800 million and is trending downwards. Open interest is the total number of unsettled contracts in a derivatives market.
The decline in open interest signifies low investor interest or rising liquidation of XRP positions. XRP's futures volumes indicate the former, as the cryptocurrency's trading volume is low, hovering between $500 million and $1.5 billion since October 1.
XRP Futures Volume
The XRP long/short ratio from the total volume is 0.935 and has remained below 1 in the past month, indicating that most traders are slightly bearish on the coin.
Ripple technical analysis: XRP could rise to $0.5608
Ripple's XRP is trading near $0.5140, up 2% on the day.
The remittance-based cryptocurrency has crossed above the upper boundary of a symmetrical triangle and the 50-day Simple Moving Average (SMA).
If XRP maintains the momentum and crosses above the 100-day and 200-day SMA, it could rally toward $0.5608. The Relative Strength Index (RSI) and Stochastic Oscillator have crossed above their midlines, indicating bullish pressure is dominant.
XRP/USDT 4-hour chart
However, a rejection near the 200-day SMA could send its price toward the support level at $0.4860. A daily candlestick close below $0.4860 will invalidate the thesis and send the price lower toward $0.4500.
Cryptocurrency metrics FAQs
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value.
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
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