It’s an interesting start to the week as the entire market has pumped after a weekend of low volumes. XRP (XRP) is up by about 6% at current prices, while bitcoin has broken above $7k on some exchanges. There are lots of speculations as to why this pump happened.
One of the possibilities emerging as the reason behind this pump is the fear that tether that might be losing value. This speculation is given strength by the fact that bitcoin has been trading at a premium on Bitfinex, an exchange with heavy USDT trading volumes. On top of that, another exchange, Kucoin, had suspended tether deposits and withdrawals earlier in the day. The fear of a tether collapse has most likely driven people into BTC, pumping it and by extension the entire market.
There is also the possibility that a short squeeze was bound to happen. In a market that has been hit by low volumes for the past week, and most investors going short, a short squeeze was inevitable, and it has happened. Today the market has seen an upsurge in volumes, and this has pretty much taken out the shorts and pulled up the market, XRP included.
However, even outside of the above, XRP (XRP) was bound to pump at some point. That’s because this crypto has achieved so much in the last quarter and all through into this quarter. For instance, XRapid is already live, and as everyone already knows, it is being used by three institutions. While they aren’t banks, they are institutions that do huge volumes of transactions and have an impact on XRP.
Once banks start going live with XRapid, it is largely expected that XRP (XRP) will shoot up significantly. That’s because the demand for XRP will shift from the retail market to the more robust institutional market. Banks buying up billions of dollars’ worth of XRP by the minute and this will most likely drive up the value of XRP going into the future.
More short-term, XRP (XRP) will most likely continue to trade in tandem with the price of bitcoin, as can be seen in today’s price action. But even then, things may be looking good. Bitcoin (BTC) seems to have found support at $6000 and has been unable to hold below this price all through the year. As such, if it rallies from this price, as has happened today, and pushes above $8000, it would pull the rest of the market with it. More so, fundamentally strong altcoins such as XRP (XRP).
Looking at XRP’s price action in the day, we can see that it is highly bullish. After today’s market-wide pump, XRP (XRP) pushed above the 1-hour 200-day moving average and has been trading above it, even in the last 3-hours when the market has retraced. If XRP (XRP) holds above $0.44 in the day, there is a high probability that it could push back and beat the day’s high of $0.524, and probably test $0.56 in the short-term.
Conversely, if today’s pump doesn’t sustain and XRP drops below $0.44, then chances are high that it could drop back to pre-pump prices at $0.40 – $0.41.