XRP, the native token of the XRP Ledger blockchain network, has notable market divergence metrics pointing to a strong bullish case, according to an analysis by Santiment.
Some of these metrics are pointed out by ‘Sanr_King,’ a pseudonymous on-chain analyst on the market analytics platform. The analysis includes whale addresses continuing to accumulate XRP rapidly and traders continuing to short. It adds that a significant long/short ratio is also on the verge of being crossed.
Sanr explains that over the past six months, the group of XRP holders who own between 1 million and 10 million tokens has been accumulating. This cohort has increased their holding by 25%, bringing their total to 4.09 billion XRP. The trend is significant as it is often seen at market bottoms. The analyst adds that the whales also strongly influence the price of XRP.
The analysis further notes that the funding rate of XRP on Binance is currently slightly negative at -0.026%. While this suggests a bearish sentiment among traders, it is spearheaded by retail traders on Binance, who may not accurately predict short-term price movements.
The metric to look out for is the 30-day MVRV for XRP—a metric that measures the profit or loss of short-term traders. The metric is currently experiencing average losses of -7%. At these levels, short-term traders are likely hesitant to sell their coins at a loss. This could lead to an XRP price surge, the analysis notes.
Similarly, the MVRV Long/Short difference metric indicates growing confidence among long-term investors. The metric measures the average profit or loss of long-term holders versus short-term holders. It’s trending upwards, although currently at -11.45%, while the price of XRP has remained relatively sideways. The analysis notes that this could also potentially lead to an XRP upswing.
Where could the bullish indicators land the XRP price?
Amid the bullish metrics, the price of XRP has mostly fluctuated between $0.28 and $0.54 for the past six months. The token trades at around $0.35, up 1.17% in the last 24 hours.
However, the bullish on-chain metrics and anticipation of ecosystem announcements could see XRP break out of this range. Popular XRP community member ‘WrathofKahneman’ recently noted that XRP has seen much more utility than it did in the early days and will also roll out more use cases in 2023.
Added to this, market participants expect a conclusion to the SEC’s case against Ripple to arrive this quarter. A favourable ruling in the case could potentially cause the price of XRP to explode as the token gets regulatory clarity.