A mix of on-chain, fundamental and technical indicators point to a massive XRP rally. However, altcoin investors continue to hold more and more XRP.
Data points to XRP rally amid stagnant altcoin market
Cryptocurrency investors are hopeful that Ripple will win the SEC lawsuit. With the legal process turning in favor of Ripple, the XRP price has made valuable gains over the past month. For example, it rose 25% thirty days after the SEC filed an immediate ruling on whether XRP sales violated securities. In contrast, Bitcoin and Ethereum fell 4% and 11%, respectively, in the same period.
Now, a number of indicators based on on-chain techniques hint that XRP may continue its uptrend as we enter 2023.
XRP price “bull pennant”
Bullish pennants are bullish continuation patterns formed when the price is consolidated in a triangle-like range after a strong upward move. In other words, it is resolved after the price breaks on the side of the previous uptrend. On the daily chart, XRP has been trending in an exemplary technical structure since the end of September as shown below. He tried to rise above the pennant twice, though he was unsuccessful during this time. He is now looking at another break in the coming days.
Theoretically, a bull pennant increases the price by the size of the previous uptrend. Therefore, the fact that XRP breaks the bull pennant pushes the price real towards $0.63 in Q4 2022. This scenario would mean a roughly 35% price rally.
Altcoin whales attract massive XRP from exchanges
The technical version of XRP takes more clues than on-chain information. This shows that the accumulation continues. According to the current Santiment information, the average purchase age of XRP has been rising since September. The metric theoretically shows that XRP investors are increasingly holding the tokens.
Additionally, the information tracker detected millions of dollars worth of XRP withdrawn from Whale Alert, Bitstamp, Bitso, and other exchanges. As a result, the potentially sellable supply on exchanges is dwindling. Notably, investors have moved $126 million worth of XRP from exchanges to anonymous wallets since October 14. By comparison, $78.99 million worth of XRP flowed into these exchanges.
The root of all of XRP’s rise over the past few months is Ripple’s potential to win against the SEC. One of Ripple’s key arguments is a speech by former SEC executive William Hinman at the Yahoo Finance All Markets Summit in 2018. Hinman said that Ethereum is not a security, although it performs a type of ICO to raise funds.
Ripple’s defense is on the side that the SEC should treat XRP like Ether. Moreover, many believe that the argument will guarantee a profit for the company.