XRP has been facing some weakness throughout the past several days and weeks, with buyers being unable to propel it above the key $0.30 region.
Despite this short-term weakness, analysts believe that its mid-term outlook is incredibly bright.
One trader is now noting that he is expecting the cryptocurrency’s price to see a major upswing that allows it to climb by a multiple of 2x or 3x by the end of the year.
He notes that there are a few crucial macro technical developments that support this notion, including its recent reclaiming of its 200-day moving average, as well as a major support-resistance flip.
On-chain data does confirm the notion that upside may be imminent, as XRP’s active address output has remained stable despite its lackluster price action over the past couple of weeks.
XRP Flashes Signs of On-Chain Strength Despite Ongoing Downtrend
XRP is currently facing some intense selling pressure that has come about as a result of Bitcoin’s overnight decline.
At the time of writing, the cryptocurrency is trading down over 3% at its current price of $0.279. This marks a notable plunge from its multi-day highs of over $0.29 that were set just a couple of days ago when bulls attempted to test its resistance at $0.30.
XRP has grown highly correlated to Bitcoin and other major altcoins, which means that it may continue seeing faltering momentum as long as they fail to extend their mid-term uptrends.
Currently, the cryptocurrency is trading at the lowest price levels it has seen since late last week. During this prior decline, it was able to establish the lower-$0.27 region as a strong support level.
Despite its current weakness, on-chain data suggests XRP may be underpinned by fundamental strength.
Analytics platform Santiment explained in a recent tweet that the crypto’s daily active address count remains high.
“In spite of XRP’s -9.2% retrace this past week, the active address output we’re seeing for the #3 market cap crypto asset has remained high. Ripple holders can take solace in it being one of the few alts with a DAA bullish divergences we’ve identified.”
Image Courtesy of Santiment.
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To justify this notion, he points to BTC’s break above its 200-day moving average on both its BTC and USD trading pairs. He also references its ability to reclaim a major support-turned-resistance level.
“Reclaimed 200D MA on both $BTC/USDT pairs. Reclaiming major S/R. You have to be blind to see that bears lost momentum and the pendulum is about to swing the other way. This is optimal entry to me. Not a 10x, but 2-3x eoy,” he stated.
Image Courtesy of Pentoshi. Chart via TradingView.
Whether or not this possibility comes to fruition will likely depend almost entirely on how Bitcoin trends in the months ahead.
Featured image from Unsplash. Charts from TradingView.