- Bullish patterns and millions of dollars in XRP acquisitions could force a market rally soon
- Other key on-chain metrics didn’t support the proposed market direction, causing a delay in the rally
XRP hasn’t made any decisive market move in the last 24 hours, as the price dropped by 0.74% on the charts. At the time of writing though, the crypto seemed to be flashing a clear path to recovery, with potential for significant gains too.
Even so, the larger market sentiment remained against its rally.
Bullish pattern and liquidity inflows
At press time, XRP’s price was forming an inverted head and shoulders pattern. Such a pattern typically precedes a major rally, with the price trending higher soon after.
This pattern, now emerging on the altcoin’s 4-hour timeframe, could cause the asset to rally up to $2.5 – A level last reached on 24 March.
Source: TradingView
Options traders are contributing to the growing bullish sentiment, as volume surged by 256% in the last 24 hours. In fact, Option Open Interest spiked to $220,860 as more traders opened new positions, likely to buy contracts.
Spot market traders have also been mirroring this bullish sentiment. During this period, these traders purchased $11 million worth of XRP from exchanges and moved the assets into private wallets.
Source: Coinglass
When a notable acquisition like this is followed by transfers to private wallets, it implies conviction among investors. If this pattern continues, it could lead to a supply squeeze in the market.
However, while the market position may be clearly bullish on the charts and among options and spot traders, the setup may be dampened by low on-chain activity.
Drop in on-chain activity could slow down XRP
Despite the presence of bulls in the market, a drop in key on-chain metrics, specifically executed transaction count and active account, might slow down the rally. Especially since they hinted at a fall in the use of XRP chain and the token.
The executed transaction count plunged from 1.56 million to 660,000 in the last 24 hours, implying fewer transactions involving XRP. Active accounts, particularly senders, have also declined sharply – From a high of 20,700 to 8,500. This finding indicated fewer traders on-chain.
Source: XRPScan
If these metrics keep falling without a significant hike in activity, XRP’s move to the upside will be at risk.