XRP is trading up almost 2%, having briefly broken above its six-day high. It is currently experiencing modest profit-taking, resulting in a slight pullback.
The altcoin reached a high of $1.37 a few hours ago, which was unsurprising, as a previous analysis had hinted at the possibility of such a surge. The outlook cited the Bollinger Bands as the basis for this move, stating that if the asset maintained trading above the SMA on the four-hour chart, a surge similar to the one seen over the last 48 hours was likely.
While prices are moving as predicted, fundamentals also contributed to the uptick. On Tuesday, several prominent accounts circulated reports that the US-Iran conflict was reportedly approaching its concluding phase and that both parties had agreed on a framework to facilitate a peace deal.
As a result, XRP gained more than 2%. Although it retraced shortly afterward, Wednesday’s green candle suggests that some of the previous day’s upward momentum has carried over.
Investors remain largely unconvinced by the latest uptrend. Consequently, modest gains and sell-offs have followed each notable rally.
On the daily timeframe, the altcoin has surrendered almost half of its previous gains and may retrace further in the coming hours. Amid the growing uncertainty, however, there are several bullish developments worth watching. One is the weekly chart, which shows the asset up 3% in nearly three days.
Interestingly, this is the first significant upward move in the last three weeks. It remains to be seen whether bulls can maintain the current trajectory. Nevertheless, on-chain data is flashing a green signal.
XRP MVRV Shows a Potential Buy Signal
Recent data from Santiment shows that some XRP traders are currently sitting at a loss. The coin’s MVRV ratio stands at around 0.92, “creating a historically more favorable, lower-risk opportunity zone than when holders are sitting on large profits.”
Traditionally, when this metric drops below 1, it indicates possible impending accumulation. With investors facing net losses, they may slow their selling and become more open to buying opportunities.
The next question is whether the altcoin will rally from here. For one, MVRV is not the most reliable indicator for determining when an uptrend will begin. There have been instances when the metric reached historically low levels while the price continued to decline.
For example, on Sept 23, Santiment announced that the indicator showed long-term holders were underwater and that XRP was trading at a discount. It added that a low MVRV generally signals reduced downside risk. Interestingly, the statement came after the asset had reached a local high, and XRP has since retraced by 13%.
While the indicator cannot determine with certainty when a downtrend has ended, it can identify potential buying zones. There have also been instances when an uptrend coincided with these conditions. Only time will tell whether this is one of them.
In summary, MVRV is currently flashing a green signal, but it is not a definitive bullish indicator.
If bulls sustain the current uptrend, the daily chart offers some insight into how XRP could salvage Uptober. The main level to watch is the $1.46 resistance. A decisive break above $1.42 could pave the way for a move toward this level, which remains significant due to the notable selling pressure around it.
Breaking above $1.46 would also increase the likelihood of the altcoin reaching $1.55. Interestingly, the emerging bullish convergence on the MACD adds to the possibility of this scenario playing out.
