Is the XRP Price Rally Sustainable?
The XRP price recently experienced a surge, reaching local highs and contributing to a revival of the crypto market. However, new data suggests that this rally may be short-lived and could lead to a decline in the overall sector. Currently trading at $0.5 with a 4% profit in the last week, XRP has been retracing its steps in the past few hours, indicating potential losses unless buyers intervene to defend these levels.
Seasonality and Potential Reversal
According to QCP Capital, a trading desk, the current rally in the crypto market aligns with seasonality trends. October, also known as “Uptober,” historically sees major cryptocurrencies like XRP trending upwards. However, the trading desk has warned that there could be a potential reversal that may have negative implications for cryptocurrencies.
However, we are not fully convinced by this move, and we think that BTC might test super key 25k support sometime in the final quarter of 2023 (…) This aggressive bounce has been due almost entirely to exogenous factors thus far and might not have the momentum to sustain.
The trading desk suggests that these factors may lack the necessary strength to sustain the current price action. Additionally, the approval of an Ethereum futures Exchange Traded Fund (ETF) in the US could potentially lead to a significant downturn.
Potential Impact of an Ethereum Futures ETF
In the past, when Bitcoin reached its all-time high of $69,000, the Securities and Exchange Commission (SEC) approved a BTC futures ETF. This event marked the top of the crypto market. QCP Capital believes that the approval of an ETH futures ETF could have similar consequences for XRP and other altcoins.
The trading desk argues that the introduction of “synthetic coins” to the market through the ETH futures ETF could create an imbalance between supply and demand forces. This could redirect demand away from the spot market, potentially leading to a negative impact on spot prices.
Short-Term Positives for XRP
In the short term, there is some positive news for XRP. The analysis shows that each US government shutdown in the past 30 years has preceded a bull run in the financial market. This could potentially benefit the cryptocurrency in the medium term. However, in the short term, XRP still has a chance to rise above $0.6. On the other hand, QCP Capital expects Bitcoin to face resistance at $29,000 to $30,000.
Cover image from Unsplash, chart from QCP Capital and Tradingview
Hot Take: Uncertain Future for XRP Price
The recent rally in the XRP price has provided hope for crypto enthusiasts, but it may not be sustainable. Despite historical seasonality trends, there are concerns about a potential reversal that could negatively impact cryptocurrencies. The approval of an Ethereum futures ETF in the US adds to these worries, as it may disrupt supply and demand dynamics in the market. Furthermore, while there may be short-term positives for XRP, such as the US government shutdown historically preceding a bull run, uncertainties remain. It’s crucial for buyers to step in and defend current levels if they want to prevent potential losses in the sector.
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