Can XRP go parabolic after this green signal?

6 July 2023

in XRP

Reading Time: 6 mins read

XRP formed a golden cross on the 10 to 20 EMA, citing a bullish trend.
The funding rate was positive but traders remain skeptical.

For the first time since 2020, Ripple [XRP] has printed a 10 and 20 EMA golden cross. The development, revealed by CoinsKid, a UK-based crypto analyst, happened this month. And according to CoinsKid, this could be the catalyst for the token to go parabolic.

#xrp – Monthly

In 2017 #xrp printed a 10 & 20 golden cross.

The last time we saw a monthly 10 and 20 EMA golden cross was in 2020 #xrp rallied over 720%.

If we see another golden cross a 720% rally sets a new ATH.

My minimal target if we see the ATH taken out is $9 for #xrp pic.twitter.com/ROvuPnznQO

— CoinsKid (@Coins_Kid) July 5, 2023

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For the unfamiliar, a golden cross occurs when a short-term Moving Average (MA) crosses the long-term towards the upside. In most cases, the price of assets involved goes a long rally after the cross occurs.

Signs to reap the benefits of patience

The analyst referred to the previous cycles when the same incident occurred with XRP. In 2017, when the golden cross happened, XRP went from exchanging hands at $0.24 in November to $2.09 by the end of the same year.

Three years later, the token rose from $0.32 in late 2020 to trade above $1 in early 2021. Because of this, the analyst opined that history could repeat itself and XRP could hit $9.

Lately, XRP has been consolidating around the $0.45 to $0.50 region. However, in the last 30 days, the token lost 10.49% of its value, implying a retracement from its impressive performance in some parts of the second quarter.

But, has this bullish signal sparked excitement among XRP traders? Well, information from Coinglass showed that traders were still skeptical about its price action.

Wait! Not so fast

According to the derivatives information portal, XRP’s long/short ratio was 0.99. The ratio considers the number of long positions compared with the short positions in the market.

A ratio above 1 suggests that there are more long positions than shorts. Conversely, when the ratio is below 1, it means short positions outnumber longs, and bearish sentiments dominated.

Therefore, the XRP’s 24-hour long/short ratio at press time, indicated that traders were tightly locked between supporting an uptrend or a slide.

Source: Coinglass

Maybe not primed for the short term, but the funding rate supported the aforementioned analyst’s bias. Typically, funding rates are periodic amounts of an asset paid between long and short-positioned traders.

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As a rule, longs pay shorts when the funding rate is positive. And this serves as a sign that the broader perception around the token was bullish.

But when it’s the other way around, it means that short traders tend to keep their bearish sentiment while paying a funding fee to longs.