XRP March Gains: Boost in confidence ahead of SEC verdict
XRP went up by 53% in just 30 days. This was quite unusual considering no other cryptocurrency performed that well in a month. The reason behind this substantial price hike could be the boost in confidence of the XRP buyers.
The people seem to be pretty confident and bullish regarding Ripple’s future. There has been a legal dispute between Ripple and US-SEC (Security and Exchange Commission). Over the contrasting views of whether XRP should be considered a security or not.
Many people are optimistic about the outcomes of this case even including President Ripple. Moreover, they believe that the verdict will be in the favor of XRP and that it will soon bounce back in the market.
However, some believe that there may be a correction coming soon for Ripple and the price of XRP may go down. This explains that the recent increase in the value of XRP might have been too fast and the value might correct itself by settling for some time.
Increase in Buying
The recent price hike for XRP was unusual due to some reasons. One of which could be that XRP has not performed this well in a long time.
As more people are optimistic about XRP’s future there are more people buying the currency than selling it. Data from Santiment suggests that there are more people making a profit from XRP rather than losing money on it.
Some other metrics like Chaikin Money Flow (CMF) and the Directional Movement Index (DMI) suggest that XRP is currently in a good state. Moreover, CMF indicated that XRP is in an overbought region, which means that may continue to increase in price. While DMI also suggests that there are strong forces that are pushing the price of the XRP.
The + DMI (green) and – DMI (red) are the indicators of buying and selling pressure of XRP, respectively. and the – DMI suggests that sellers have not been able to penetrate the buying pressure. While + DMI shows an intensive impenetrable buying pressure.
The Average Directional Index (ADX) is also above 25, thus there is strong support for XRP’s upward movement.
So is XRP really a security?
Ripple’s CTO David Schwartz stepped in on the bandwagon of whether XRP is a security or not. He stated in a tweet that XRP cannot be considered a security. Since the Ripple ecosystem is now open source and users can access the XRP Ledger (XRPL) without involving a third party.
However, despite XRP’s recent surge to a five-month high, short-term investors should be cautious and careful of further gains. As the token currently trading at $0.5336. The Market Value to Realized Value (MVRV) Z score. This indicates if an asset is undervalued or not based on the current cycle. Despite a significant increase in recent times, the buyer must be careful regardless.