XRP is up 3%, bucking the bearish trend as indicators point to positive momentum.
With bearish sentiment dominating the market, XRP unexpectedly recorded a massive 3% gain, a ray of hope for investors amid a broader market decline. But what are the factors behind this unexpected rally?
Since breaking out of the symmetric triangle, Ripple’s token has continued to rise to its current range.
Source: Tradingview
XRP’s scarcity drives demand
Another factor that has contributed to XRP’s recent success is the decline in total supply.
According to data from Cryptoquant, the overall supply of XRP is trending downwards, which creates scarcity and stimulates demand for XRP, leading to an increase in value.
This development is well known to investors and will therefore influence price movements: if XRP becomes scarce and its demand stagnates or increases, the price is more likely to rise than fall.
This basic economic concept has accounted for much of the company’s recent gains.
Source: Cryptoquant
AMBCrypto further analyzed the taker, buyer, and seller ratio data, which currently stands at 0.908, indicating that the number of XRP sellers in the market is slightly higher than the number of buyers.
In fact, they are almost even, meaning that some changes may be coming. This increase in buyers and the aforementioned decrease in supply are expected to push the price higher and target the next resistance zone.
Source: CryptoQuant
What happens next?
The market for XRP is currently characterized by a declining total supply and a buying/selling ratio close to equilibrium.
Ripple [XRP] Price Forecast 2024-25
This explains why, despite the overall bearish market trend, the stock still managed to rise 3%.
The recent 3% increase in price indicates that investors are gaining confidence in XRP, and if this trend continues and the ratio favors more buyers, there will be a continuing force pushing XRP higher.
