XRP price searches for a fresh bullish catalyst to trigger a move above $1

XRP (XRP) price booked an incredible 100% gain on the same day as the landmark ruling in the XRP securities case, but buyers are now struggling to hold on to these gains. 

The price surge came after judge Analisa Torres of District Court of the Southern District of New York ordered that XRP sale to retail investors does not qualify the token as a security in the U.S. Securities and Exchange Commission’s (SEC) case against Ripple.

While the trading interest in XRP is reviving, the technical and network usage data hint at a short-term pullback.

Traders flock to XRP but network growth stalls

According to Coinglass data, the open interest volume for XRP futures contracts, which represents the total value of open bets for the asset, surged to its highest point since November 2021, reaching $1.19 billion on July 20.

XRP price searches for a fresh bullish catalyst to trigger a move above $1
XRP future open interest volume. Source: Coinglass

XRP’s spot trading volumes topped Bitcoin and Ethereum and U.S.-based exchanges like Gemini and Coinbase relisted XRP, boosting the market’s sentiment further.

Despite these positive developments, the network’s activity has not witnessed a similar increase. The number of transactions on the XRP Ledger has remained consistent for over a year, indicating a scarcity of new entities actively participating in the network.

The XRP Ledger is a blockchain-based distributed ledger technology (DLT) that was created by Ripple Labs. XRP is used as a payment token on the network and also used to secure the blockchain.

XRP price searches for a fresh bullish catalyst to trigger a move above $1
The number of transactions executed on the XRP Ledger. Source: XRP Scan

Since Ripple’s partial win in the lawsuit against the SEC, the firm has ramped up its efforts for XRP Ledger adoption. Starting with participating in a $54 million investment in a metaverse project, Futureverse.

The firm will also seek to re-establish its ties with banks aligning with its original vision of facilitating low cost global payments. These will likely promote the network growth of XRP Ledger and act as positive catalysts for the market.

XRP/USD price analysis

Technically, the XRP/USD pair shows resistance from its long-term bearish trendline since the 2018 peak. A weekly close above this level should strengthen investor sentiment and mark an end to the bearish trend.

If buyers fail to maintain the bullish momentum, XRP/USD will likely revisit support around $0.54 before making a move higher.

XRP price searches for a fresh bullish catalyst to trigger a move above $1
XRP/USD weekly price chart. Source: TradingView

The XRP/BTC pair is also stuck at a long-term resistance level between 0.00002533 BTC and 0.00003341 BTC. Buyers have failed to make a move above it since 2019. Failure to build support above this level can likely cause the pair to revisit support around 0.00001555 BTC.

Related: XRP price can fall 40% by September — Fractal analysis

A correction would be considered bullish if the pair finds support at the 50-period MA at 0.00002057 BTC or the 200-period moving average at 0.00001913 BTC.

XRP price searches for a fresh bullish catalyst to trigger a move above $1
XRP/BTC weekly price chart. Source: TradingView

As mentioned above, the futures open interest for XRP is at a two-year peak of over $1 billion in notional value. Thus, XRP will likely exhibit significant volatility in the near term.

The funding rate for perpetual swaps, which represents relative the demand for long or short orders for the token, has trended positive since the court’s iconic ruling, suggesting that most traders added long positions. Once again, raising the possibility of a correction to hunt the liquidation levels for overleveraged buyers.

Given the positive regulatory development, technical progress, and the popularity of the token among retail users, it is likely XRP’s long-term negative trend could end in a few weeks with the arrival of positive catalysts relating to XRP’s mainstream adoption.