XRP Recovers Above $3: Exploring Why This Could Signal a Record High for XRP
In a recent development, XRP, the fourth-largest cryptocurrency by market capitalisation, has seen a significant surge in value. This rebound comes after the digital asset caught the local bottom and climbed past key resistance levels.
On August 22nd, Federal Reserve Chair Jerome Powell hinted at the possibility of interest rate cuts during his speech at the annual central bank meeting in Jackson Hole, Wyoming. His comments suggested a shift towards lower interest rates due to economic uncertainties and rising labor market risks. This potential move from the Fed could have a positive impact on the crypto market, including XRP.
The buy signal for XRP was caught just before the market-wide rally, with the digital asset climbing past the 20 and 50-period moving averages, which have yet to catch up with the momentum reversal. A crypto analyst named Ali Martinez observed that the TD Sequential indicator presented a buy signal for XRP, further supporting the bullish sentiment.
If XRP bulls can hold the $2.95 demand zone, a rally towards the $3.4 resistance would be likely. This is based on the observation that Ripple [XRP] rebounded from the $2.7-$2.8 support zone for the second time in August.
The Chaikin Money Flow (CMF) for XRP also climbed above +0.05, indicating sizeable capital inflow to the XRP market. This further strengthens the bullish outlook for XRP.
Meanwhile, other cryptocurrencies have also seen significant gains. Bitcoin [BTC] rose strongly from $111.6k to $116.3k, a 4.2% move. Ethereum [ETH] gained 14.87% to reach $4,833. The Dow Jones Industrial Average also showed a gain of 600 points.
Interestingly, the exchange net position change for XRP turned deeply negative in the second half of August, rivaling the change from February. This negative position change on exchanges reflects reduced supply held in exchange wallets, indicating accumulation from holders.
According to the Fed Watch Tool, there is a 75% chance of a rate cut in September. If this happens, it could further boost the crypto market, including XRP. However, it's important to note that the market is subject to volatility and unpredictability, and investors should always do their own research and consider their risk tolerance before making investment decisions.
