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John Isige
FXStreet
Ripple (XRP) trades above the crucial $3.00 level on Wednesday as the broader cryptocurrency market awaits the United States (US) interest rate decision. A favorable outcome for crypto markets would mean a 25-basis-point rate cut by the Federal Reserve (Fed), which could support XRP’s bullish potential and potentially lead it toward its record high of $3.66, reached on July 18.
Some on-chain metrics, such as Exchange Outflows (Binance), support the bullish case for the cross-border money remittance token. According to CryptoQuant data, holders are aggressively withdrawing XRP from Binance, opting for self-custody of their assets.
Approximately 146.3 million XRP was drawn from the exchange on September 11, compared to subdued outflows since August 27. This represents a bullish trend, reflecting investor confidence in the ecosystem and XRP’s potential to sustain a recovery toward its all-time high.
XRP Exchange Outflows – Binance | Source: CryptoQuant
Still, traders must temper their bullish expectations following a sudden increase in the Exchange Reserve metric (Binance). According to CryptoQuant data, the balance of XRP on exchanges averaged at 3.6 billion coins on September 12, compared to 2.9 billion coins on August 31.
Holders deposit into exchanges when they intend to trade or sell crypto assets. The surge in exchange balances implies potential selling pressure. Therefore, traders must be cautious, despite the bullish potential, as gains could be quickly snuffed out by investors selling to realize profits.
XRP Exchange Reserves – Binance | Source: CryptoQuant
Meanwhile, retail demand for XRP remains relatively high, with the futures Open Interest (OI) averaging at $8.47 billion on Wednesday, up from $7.37 billion on September 7.
XRP Futures Open Interest | Source: CoinGlass
A steady OI, referring to the notional value of outstanding futures contracts, indicates that more traders are betting on short-term price increases in XRP. As risk-on sentiment improves, the path of least resistance remains upward, increasing the chances of the XRP price breaking out to its record high of $3.66.
XRP remains above the $3.00 level, with the 50-period Exponential Moving Average (EMA) at $3.01, providing additional support. A minor reversal of the Relative Strength Index (RSI) to 49 on the 4-hour chart supports XRP’s short-term bullish potential.
A bullish reversal above the next key hurdle at $3.18, which was last tested on Saturday, would boost the chances of a bullish outcome toward the round-number supply area of $3.50 and the record high of $3.66.
XRP/USDT daily chart
Conversely, XRP is not out of the woods yet, and declines below $3.00 are still on the cards. With the Fed likely to cut interest rates by 25 bps, attention could shift to the Chair Jerome Powell’s remarks after the meeting.
Investors would be waiting to see the central bank’s outlook for the remainder of the year and whether further rate cuts are expected. In the event of a hawkish stance, which could dampen the macro outlook, traders should also prepare for a short-term correction, likely to bring the 100-day EMA at $2.98 and the 200-day EMA at $2.96 within reach.
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value.
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
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Toshi (TOSHI) memecoin price surged more than 40%, trading above $0.000855 at the time of writing on Wednesday. This rally follows the confirmation of Upbit, South Korea’s largest crypto exchange, for the TOSHI listing.
Ethena (ENA) price trades below the $0.7000 level at press time on Wednesday, extending the downfall for the fifth consecutive day. Still, the derivative and technical outlook present a bullish reversal possibility.
Bitcoin (BTC) could be poised for a price surge following its positive correlation with the S&P 500, as market participants anticipate a 25-basis-point rate cut from the Federal Reserve on Wednesday.
Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) could face heightened volatility this week as markets brace for the Federal Reserve’s rate decision announcement on Wednesday.
Bitcoin steadies around $115,000 at the time of writing on Friday, having recovered nearly 4%. This recovery is further fueled by strong institutional inflows and renewed corporate accumulation this week.
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