Ripple price saw a strong recovery this week, driven by increased whale activity.
Ripple (XRP) price has seen a strong recovery this week, driven by increased whale activity. XRP surged to $0.5705 on Tuesday, its highest level since April 12, marking a 50% gain from its lowest point this month.
Ripple’s performance coincides with a massive whale buildup. Data from Santiment reveals that large XRP wallets purchased over $300 million worth of tokens between July 12 and 15.
Large transactions like this often indicate that insiders are buying ahead of a major event.
This trend is also reflected in the technical charts. The Accumulation/Distribution (A/D) indicator has reached a record high, indicating strong accumulation. Additionally, XRP has broken through the key resistance at $0.4845, the January low, and moved above the 200-day and 50-day exponential moving averages (EMAs). The Average Directional Index (ADX) is at 34, indicating strong momentum.
The ADX is a popular trend indicator that measures the strength of a trend. A value of 25 or higher typically indicates that an asset has strong momentum.
Ripple rises amid risk sentiment
Ripple’s rise occurred in a risk-on market environment. The US Dollar Index (DXY) fell to $104.40 from its year-to-date high of $106.30.
The VIX index fell to 13 while US stock indexes are operating at full capacity. The Dow Jones Index rose. to an all-time high of $40,700 while the S&P 500 and Nasdaq 100 were trading at $5,640 and $18,500.
Meanwhile, most cryptocurrencies continued to rally, with Bitcoin retesting the crucial $65,000 resistance point for the first time in weeks and the crypto fear and greed index approaching greed territory.
Despite the recent surge, there is a risk that the XRP price may soon pull back. The Relative Strength Index (RSI) has moved to 72, indicating overbought conditions, and the Stochastic Oscillator lines have also reached overbought levels.
Another risk that Ripple faces relates to its fundamentals. As I wrote recently, Ripple was created to facilitate cross-border transactions by companies operating in the banking and cross-border sectors.
Some of these companies have found that stablecoins or tokenized platforms are a better alternative to Ripple’s on-demand liquidity feature. For example, MoneyGram has partnered with Stellar to allow users to easily send and receive USDC stablecoins globally.