LUCKNOW (CoinChapter.com)— Ripple’s ongoing battle with the SEC has entered a new phase, marked by increased speculation about a potential SEC appeal following the court’s ruling that XRP is not a security when sold to the public.
While this ruling initially boosted XRP, the looming uncertainty of a possible appeal has cast a shadow over the market. Ripple’s position remains precarious as market participants await further developments, and the potential implications of this legal saga continue to weigh on XRP’s price action and investor sentiment.
The recent fluctuations in XRP’s market dynamics reflect this tension as traders and investors navigate a landscape of uncertainty.
Futures And On-Chain Data Reflect Caution Among Investors
Recent data from XRP futures and on-chain analysis reveal how market participants react to Ripple and XRP’s ongoing uncertainty. The XRP Futures Open Interest (OI) has slightly increased, suggesting that traders are positioning themselves in anticipation of potential price movements.
The rise in OI typically indicates a growing interest in the market, with traders opening new contracts as they speculate on XRP’s future price action. However, the increase in OI is accompanied by a declining funding rate, which suggests a growing bearish sentiment.
A negative funding rate indicates that short positions are becoming more dominant, with traders expecting a potential decline in the XRP USD pair. This bearish outlook is likely driven by the uncertainty surrounding the SEC’s next move and the broader market sentiment.
In addition to futures data, on-chain metrics provide further insights into the behavior of XRP holders. A detailed analysis of whale activity reveals that large holders, specifically those with between 10 million and 100 million XRP, have steadily accumulated over the past few weeks.
The accumulation suggests that these large entities, often institutional investors, are positioning themselves for a long-term bullish scenario, potentially betting on a favorable outcome for Ripple in its ongoing legal battle.
Similarly, large retail investors, holding between 1 million and 10 million XRP, have also increased their holdings. The recent spikes and subsequent dips in this group’s holdings indicate volatility and uncertainty, reflecting the cautious optimism permeating the market.
Meanwhile, mid-tier investors, holding between 100,000 and 1 million XRP, have remained relatively stable, with minor fluctuations in their holdings. The group’s cautious approach suggests that not all market participants are convinced of a bullish outcome, highlighting the mixed sentiment in the market.
XRP Price Testing Pattern Resistance
Meanwhile, the XRP price has formed a bullish pattern called the ‘falling wedge,‘ with the token currently testing the pattern’s upper trendline resistance. To confirm the breakout, the XRP price would need to break above and form subsequent higher candles.
The pattern typically signals that an asset’s price is losing bearish momentum while in a downtrend and may be getting ready for an upward reversal. In the case of a falling wedge, the expected breakout generally follows the prevailing trend, which, in this scenario, is upward.
To estimate the price target for a falling wedge, traders typically measure the widest part of the wedge at its inception. This distance is then projected upward from the breakout point, establishing a potential price target.
A surge in trading volume accompanying the breakout often confirms its validity. Higher volume suggests stronger market conviction, increasing the probability of a sustained price reversal.
According to technical analysis principles, if the XRP USD pair successfully breaks out of the bull pennant, it could theoretically target a level nearly 111% higher than its current price, suggesting a potential rise to approximately $1.28.
