XRP price reclaims $0.60, eyes 15% rally even as Ripple trading volume hits four-year low in Q3

XRP price is looking to rally toward $0.700 after successfully breaching a 10-week-long barrier.
The mostly positive funding rate suggests that this is not the local top, as traders are holding a long position.
The biggest driving force for Ripple is its partial win against SEC, given it registered a four-year low in terms of trading activity in Q3.

XRP price is making consistent growth, and by the looks of it, traders and investors are highly bullish regarding the future price action of the token. But while a price rise is a positive development if it is not backed by trading activity, it might not be too long before it corrects, which could be a threat to Ripple.

XRP price gains spectacularly

XRP price at the time of writing can be seen trading at $0.609 after breaching the multi-month resistance level of $0.600. Reclaiming this price point as a support level is crucial to the altcoin, which would be confirmed after a daily candlestick close above the line.

Testing $0.600 as a support level is important for the XRP price as it would serve as a boost to the token, which is eyeing $0.700 as its next target. The cryptocurrency warrants a 14.7% rally to achieve this, in addition to breaching the barrier at $0.644.

Should XRP price manage to breach the aforementioned resistance level, it would not be long before the token hits $0.700.

XRP/USD 1-day chart

On the other hand, losing $0.600 would prove to be rather harmful to the altcoin as XRP price would become vulnerable to slipping toward $0.551 or even lower at $0.540. Falling through these support lines would invalidate the bearish thesis, ending the chances of the Ripple token hitting $0.700.

Funding rates suggest Ripple may not dip

Ripple rally would only continue if investors not only seemed bullish but also acted in accordance with the sentiment, which XRP traders are doing right now. According to data obtained from CoinGlass, the funding rate for the Ripple token is seemingly higher above average.

A positive funding rate suggests that long positions dominate short positions as the funding fee received by long contracts exceeds that from short contracts. A higher number of long contracts means that traders are speculating about a price rise, which would support XRP price shooting up toward $0.644.

XRP funding rate

However, the recently released Q3 2023 XRP Markets Report shows that throughout the third quarter, despite XRP price rallying by nearly 73%, the trading volume remained at a low. In fact, it was so low that it averaged a four-year low of $300 to $400 million a day.

This shows that without substantial fundamental bullishness, even sentiments are useless, as any gain registered would be corrected. Up until now, the only driving factor for the price was Ripple’s partial win against the Securities & Exchange Commission (SEC), but support from traders would prove to be a significantly solid catalyst.

Open Interest, funding rate FAQs

How does Open Interest affect cryptocurrency prices?

Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.

How does Funding rate affect cryptocurrency prices?

Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.