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$XRP is moving higher on the charts again, but this rise may not be as straightforward as it looks.
The latest move looks powered by spot, than derivatives. In fact, some perp traders might still be betting against $XRP, keeping things interesting.
Spot buyers are carrying $XRP
$XRP’s move back near $1.20 looks like a recovery caused by spot traders.
The clearest sign is in CVD. All CEX Estimated Spot CVD climbed to $267.4 million – Is highest level since mid-May. This is a big turnaround from mid-April, when the metric was around -$177 million.
Source: Cryptoquant
Buyers in the spot market have returned to the support price too.
However, Binance perpetual traders seemed to be doing the opposite at press time. Binance Perpetual CVD fell to a record -$792.5 million, much lower than around -$218 million in mid May.
This suggested that $XRP has been rising, despite heavy perp selling, making the current move potentially unstable.
Leverage rises, supply falls!
This spot-perp split becomes more important when you consider a few other things.
Source: Cryptoquant
On Binance, $XRP’s estimated leverage ratio was 0.187 – Close to the highest level seen in this period. Traders seemed to be taking on more leveraged exposure, even with the price being rebuilt above $1.20.
Source: Cryptoquant
At the same time, Binance’s exchange supply ratio fell to nearly 0.0268, implying that there may be enough to sell.
If spot buyers keep absorbing perp selling, $XRP can move higher quickly. However, with leverage this elevated, any weakness in demand can cause a pullback on the charts.
$XRP at an important point?
Spot buyers are strong enough to support the price, while Binance perp traders may be heavily short. If spot demand continues, those short positions may come under pressure and $XRP could rise on the charts.
However, it’s still risky. With high leverage, any drop in buying strength can flip things bearish very quickly. For now, $XRP looks set for a volatile move.
Final Summary
- $XRP rose up on the charts thanks to strong buyer support.
- Its surge has been feeble though, and volatility can be expected.
