Strong Bullish Scenarios Emerge, Will Price Rally in 2023?

On-chain analytics firm Santiment notes that XRP is exhibiting some intriguing network divergences that point to strong bullish cases.

At the time of publication, XRP was marginally up in the last 24 hours at $0.347. In a community post, Santiment highlights a build-up of bullish scenarios for the sixth largest cryptocurrency, XRP.

🐂 The #XRPNetwork has some intriguing network divergences pointing to strong #bullish cases. Our community post discusses whale addresses accumulating rapidly, traders continuing to #short, and a significant long/short on the verge of being crossed. 🤞 https://t.co/GHKKgAsoCw pic.twitter.com/RCOwEUaXji

— Santiment (@santimentfeed) January 2, 2023

For the last six months, the price of XRP has generally fluctuated between $0.28 and $0.54, while it has declined since 2021. According to Santiment, this was part of a bigger ascending trend that may eventually form a triangle, and the XRP price is currently at the bottom of this triangle.

Second, over the past six months, the group of XRP holders that possess between 1 million and 10 million XRP has increased their holdings by 25%, bringing the total to 4.09 billion XRP. This degree of accumulation is typical at market bottoms.

Third, Binance’s funding rate for XRP is slightly negative, indicating a bearish sentiment among this set of traders.

Fourth, the MVRV 30-day for XRP, which assesses their profit or loss, shows that short-term traders are currently experiencing average losses of -7%. Therefore, they might be reluctant to sell their coins at a loss, which would boost the price of XRP.

Last but not least, if the MVRV Long/Short difference, which measures the difference between the average gain or loss of long-term holders and short-term holdings, is rising while the price is largely moving sideways, it may indicate that long-term holders are growing more optimistic and increasing their holdings.

Will XRP price rally in 2023?

Aside from the favorable technical and fundamental factors listed above, the successful resolution of the Ripple-SEC lawsuit is expected in 2023, which many expect will boost the XRP price.

On the general crypto market, investors continue to watch out for clues as to the Fed’s interest rate hike throughout 2023. The next FED meeting is not due until the end of January.

XRP might imitate the general market price action or, on the other hand, squash this trend by decoupling, as it did briefly in the past year. Hitherto, XRP remains an asset to watch in 2023.