- Declining XRP exchange reserves and rising open interest reveal strong bullish sentiment among investors.
- XRP's Estimated Leverage Ratio (ELR) signals high-risk leverage; corrections often follow peak ratios.
- A confirmed rounding bottom pattern could propel XRP to $1.96.
Ripple (XRP) traded at $1.11 on Wednesday, maintaining its position as the top-performing cryptocurrency among the top 20 by market cap, with a weekly gain exceeding 50%. On-chain data and technical patterns suggest this remittance-focused token may continue its upward trajectory toward $1.96, fueled by persistent bullish confidence.
On-Chain Data Highlights Bullish Dominance for XRP
Per CryptoQuant, investors withdrew nearly 250 million XRP tokens from Upbit—a South Korean exchange holding the largest XRP reserves—over the past seven days. These withdrawals reduced Upbit’s XRP reserves to a four-month low of 6.3 billion XRP. Binance’s XRP reserves mirrored this trend, declining after peaking on November 12.
Key Observations:
- Reduced exchange reserves indicate heightened buying pressure, potentially driving prices higher.
- XRP futures open interest surged to a record $1.98 billion on Sunday (Coinglass), stabilizing at $1.84 billion by Wednesday.
Estimated Leverage Ratio (ELR) Warns of Correction Risks
XRP’s ELR—reflecting traders’ leverage usage—hit 0.17 last Saturday, the highest since January. While rising ELR suggests bullish bets, extreme levels often precede sharp corrections.
👉 Why XRP’s leverage trends matter for traders
Technical Analysis: Rounding Bottom Pattern Hints at $1.96 Target
XRP’s 100% two-week rally aligns with a potential rounding bottom formation. A breakout above the 3-year resistance at $1.35 would validate the pattern, targeting $1.96.
Indicators to Watch:
- RSI: Overbought signals suggest possible pullbacks.
- Awesome Oscillator (AO): Green bars above neutral confirm bullish momentum.
Failure Scenario: A daily close below $0.74 could invalidate the bullish outlook, pushing XRP toward $0.38.
FAQs About Ripple (XRP)
1. What is Ripple’s role in cross-border payments?
Ripple Labs Inc. operates RippleNet, a blockchain-based network enabling seamless global transactions for financial institutions, utilizing XRP for liquidity.
2. How does XRP differ from other cryptocurrencies?
XRP powers the XRPLedger, featuring a unique consensus protocol to prevent spam/DDOS attacks. It facilitates trustless, instant payments via the Interledger Protocol (ILP).
3. Who created XRPLedger?
Developed by Jed McCaleb, Arthur Britto, and David Schwartz, XRPL is maintained by a decentralized P2P network (Global XRP Ledger Community).
👉 Explore XRP’s utility in modern finance
4. Why is XRP’s supply significant?
XRPL’s fixed supply of 100 billion XRP (with periodic escrow releases) ensures predictable inflation, contrasting with mining-based cryptocurrencies.
5. Can XRP reach $2?
A breakout above $1.96 would mark XRP’s first entry into the $2 range in six years, contingent on sustained bullish momentum and adoption.
6. What risks do traders face with high leverage?
Elevated ELR ratios (like 0.17) often trigger liquidations; prudent risk management is essential during volatile rallies.
Key Takeaways
- Bullish indicators: Declining reserves, rising open interest.
- Critical levels: $1.35 (confirmation), $1.96 (target).
- Risks: Overleveraging, RSI divergence.
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