Can you reclaim 60 cents?
The price of Ripple (XRP) appears to be heading towards a bullish trend as large investors react positively to an important announcement from Grayscale. On January 5th, Grayscale announced that it had added XRP back to its Digital Large Cap (GDLC) index fund after a two-year absence. As of January 9th, XRP now makes up 2.39% (~$10 million) of the $400 million fund.
Grayscale, a subsidiary of Digital Currency Group (DCG) founded in 2013, has become a well-known digital currency asset management company. The asset manager had removed XRP from its fund in 2020 following a lawsuit filed by the US Securities and Exchange Commission (SEC) against Ripple.
The decision to re-add XRP to the fund is a recognition of the regulatory clarity surrounding the Ripple-backed cryptocurrency since US District Judge Analisa Torres declared XRP “not a security” in July 2023.
Interestingly, since Grayscale’s announcement, other corporate investors within the ecosystem have also reacted. Santiment’s on-chain metric, Supply by Addresses, shows that a strategic group of whale investors (wallets holding balances of 1 million to 10 million XRP coins) have made significant acquisitions in the past few days. These whales held a total of 8.92 billion coins in their balances, which has now increased to 8.99 billion as of January 9th. This indicates that corporate entities and high-net-worth investors have acquired an additional 70 million XRP coins between January 5th and January 9th.
With XRP currently trading at $0.56, these newly-acquired coins are worth approximately $39.2 million. When whales increase their buying pressure, it is typically seen as a bullish signal by strategic investors. If this buying trend continues, it could create a disproportionate increase in market demand and boost confidence among retail stakeholders.
Historical data shows that recent price swings have been closely related to the whales’ buying and selling trends. If this pattern continues, XRP holders can hope for a potential retest of $0.60 in the days to come.
From an on-chain perspective, Grayscale’s announcement of a $10 million investment in XRP seems to have sparked a bullish reaction among other corporate investors. If the whales sustain their buying trend, the price of XRP could reclaim the $0.60 territory in the near future.
The Relative Strength Index (RSI) technical indicator also supports this bullish prediction. It shows that XRP’s RSI has recently entered the 30+ area from below, signaling a potential reversal to a bullish trend.
To seize the initiative, the bulls must first break through the $0.60 territory. However, there could be a significant sell-wall around $0.61, as shown by the Bollinger middle band. A decisive breakout from that resistance zone could trigger a rally towards the $0.66 price range.
On the downside, the bears could invalidate this bullish forecast if XRP loses the crucial support level of $0.50. However, this scenario seems unlikely considering the ongoing buying trend among crypto whales. To prevent this bearish scenario, the bulls could regroup around $0.55, as indicated by the lower Bollinger Band.
Overall, the outlook for XRP’s price is positive, with the potential for a bullish trend as whale investors respond positively to Grayscale’s announcement.
