XRP has recently benefitted significantly following the end of the prolonged Ripple-SEC lawsuit. Ripple has settled with the SEC by agreeing to pay $50 million, down from an initial penalty of $125 million.
This news has stimulated an increase in XRP’s price. However, despite these positive developments, rising profits among short-term holders could pose a threat to a sustained recovery in Altcoin, making it difficult to break through critical resistance levels.
XRP investors are sending bearish signals
The long-short difference in MVRV, currently sitting at a low not seen in 31 months, indicates that short-term holders are seeing increased profits. A low reading here suggests that these holders, who typically sell quickly, might realize their profits. This could create a bearish trend for the market.
Selling at the first hint of profit may restrict XRP’s ability to maintain its upward movement. If a significant number of short-term holders decide to cash out, XRP might struggle with breaking through its main resistance level and could face downward pressure. Additionally, an uptick in profits for these holders could foster an environment conducive to speculative selling, particularly during short-term price fluctuations.
The overall momentum for XRP presents a mixed picture. On one hand, the key technical indicator, West Sea Cloud, currently signals bearishness, suggesting market sentiment is skewing towards a downtrend. Yet, the candlestick looks like it might approach a potential breakout above a one-sided cloud.
If the candlestick successfully breaks above this cloud, it could indicate a shift in market sentiment. A confirmed upward movement could empower XRP to challenge higher resistance levels.
XRP prices should break out
XRP has experienced an 8% increase in the past 24 hours, partly due to a general bullish trend in the market alongside Ripple’s SEC settlement. As a consequence of that settlement, Ripple will pay $50 million, refunding the remaining $75 million of the initial $125 million penalty. Currently, XRP is trading at $2.29.
Nevertheless, XRP is encountering formidable resistance at $2.38, a level it has struggled to surpass for over seven months. If short-term holders opt to sell at the current price, it may limit XRP’s ability to push past this resistance, resulting in a consolidation range between $2.38 and $2.12 and potentially stalling breakouts.
If XRP manages to bounce back after hitting support just below $2.38, it could initiate a more sustained rally. Clearing this resistance level might open the door to prices reaching $2.56, shifting the current bearish or neutral outlook. Successful breakouts could reflect market confidence and pave the way for increased long-term profits.
