XRP shows a price consolidation in play that could lead to a new yearly high. The recent XRP recovery from the dip into the demand zone suggests the presence of strong buyers.
XRP continues a steady climb since the crash in late April. Since then, Ripple price has set up three higher highs and four higher lows, indicating a steady price uptrend. The recent dip on May 9 saw XRP enter the demand support barrier that stretches from a price of $1.37 to $1.47.
Now, investors can expect the remittance token to surge toward the immediate resistance level at the 162% Fibonacci extension level, located at $1.65.
A successful breach of this wall will allow the buyers to charge toward a price of $1.76, a level last seen in mid-April. Depending on the buying pressure, XRP price could either take its time to overcome these support levels or just slice through them with consecutive green candlesticks.
The funding rate for Ripple XRP price is 0.093%, after dropping from 0.226% on May 8. Such a low funding rate, coinciding with the recent crash, indicates that the highly leveraged long positions are liquidated, allowing sidelined investors to step in and ride the wave to a price of $2.
Moreover, the brief collapse on May 9 could have caused the weighted sentiment to enter the negative territory, portraying that investors are not optimistic about Ripple price, which is bullish from a counter-sentiment perspective.
Another metric that portrays the bullishness around XRP price is the 30-day Market Value to Realized Value model, which tracks the network’s the profit/loss of investors that purchased Ripple XRP in the past month.
The MVRV value for Ripple price currently stands in the opportunity zone at 5.5%, which indicates that only 5.5% of the network participants are in profit. Hence, the possibility of a price correction induced by investors booking profits is almost zero.
All in all, the XRP looks bullish, but a potential spike in bearish momentum that pushed the remittance token below the price of $1.37 would invalidate the bullish outlook and kickstart a bearish one.
Under such conditions, the XRP price could slide toward the 50% Fibonacci retracement level at a price of $1.31. Breaching this support level could trigger an 11% downswing to $1.16.
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