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XRP’s price activity has been an exciting rollercoaster ride over the last four months. From $1.9 to $0.5, the alt made a shooting move. With XRP rebounding over $1.2, the market appears to be targeting higher levels of $1.35, $2.44, and finally a bounce above $6.39.
However, are these just wild guesses, or will the rally eventually send XRP soaring past $6.39?
The fair-value gap within grasp?
Without a doubt, the Ripple v. SEC litigation has had a significant impact on the rise and fall of XRP. The most recent development in the continuing dispute was the SEC’s opposition to Ripple’s demand ordering it to reveal documents on its employees’ XRP holdings. The recent stream of updates has exacerbated XRP’s volatility.
It is crucial to remember, however, that the current gain was mostly powered by broader market mood and Bitcoin’s advance. Nonetheless, XRP was viewed decoupling from the broader market attitude and generating its own rally, as it only required a 25% increase to bridge its fair value gap. Can traders profit from the coin’s current excellent fortunes?
As crypto strategist “Dark Defender” mentioned, XRP’s road to $6.39 looked clear if XRP successfully managed to stay above the resistance in daily charts. Further, a weekly close above $1.26-$1.27 was also very important for the alt.
In addition to this, as the asset made higher lows on the 12-hour chart, the possibility of a jump to $6 cannot be discarded. The ascending pattern on XRP charts will first target $1.35 followed by $2.44 and then a bounce towards $6.39.
The market preparing for an upward move?
A price increase or decrease is usually preceded by significant transfer volumes and/or whale movements. Notably, substantial amounts of XRP have been transferred from accounts to exchanges. According to Whale Alert data, an unidentified wallet transmitted more than 205 million XRP to Ripple.
While Bittrex and Upbit exchanged 21 million XRP, Binance and Huobi swapped 71 million XRP between them. The expectation of a forthcoming shift could have sparked the same.
While most indicators showed optimistic signs for XRP accompanying its nearly healthy price action, XRP’s Sharpe ratio fell sharply after recently reaching a 2-year high. A drop in Sharpe ratio indicated that XRP gave fewer profits against a risk-free asset.
However, when it comes to volatile assets like cryptocurrencies, looking at Sortino ratio provides a better picture. Notably, XRP’s Sortino ratio was much higher than some of the top alts like LTC and BNB as it noted 0.0861. A rational investor would prefer an investment with the higher Sortino ratio because it means that the investment is earning more return per unit of the bad risk that it takes on.
Thus, while XRP still showed resistance its traders could capitalize on the same, by trading once it breaks the crucial $1.3 level which wasn’t too far away at press time.