Why the Q3 supply zone should be on XRP’s traders’ watchlist…
- XRP’s rally edged closer to the Q3 supply zone. Will whales intensify profit-taking at the zone again?
Ripple [XRP] posted 11% gain last week, partly boosted by Grayscale’s inclusion of an XRP Trust to its line of crypto products.
However, the altcoin was on the verge of hitting a Q3 supply zone near $0.06. This zone has attracted intense profit-taking in the past, especially from whales. Will the trend repeat according to XRP price prediction?
Will the supply zone reverse XRP price prediction?
Source: XRP/USDT, TradingView
XRP has printed a clear price trend in Q3. Notably, the strong recovery in July and the partial victory against SEC in August ended near the supply zone at $0.6. This has made $0.6 a key price level to watch, especially during price appreciation.
At press time, this week’s upswing was headed into the supply zone. If the trend repeats and another price rejection occurs, XRP could drag to $0.54 support.
In such a scenario, shorting the asset would yield gains, especially if the overall market cools off ahead of the FOMC meeting.
However, given the bullish expectations from Fed rate cuts, market re-entry would make sense only if XRP flips the supply zone into support.
Meanwhile, the RSI showed more room for the current uptrend, while the stochastic RSI flashed overbought conditions. This further signaled the supply zone should be pinned as a crucial watchlist.
Exchange flow shows eased selling, but…
Source: CryptoQuant
This week’s XRP rebound was also marked by reduced sell pressure on centralized exchanges, as shown by a sharp drop in exchange inflows.
On Binance, XRP’s inflow dropped from nearly 1.8 billion tokens on 8th September to around 50.9 million at the time of writing. This reduced supply pressure aided this week’s uptrend.
However, a price rally to $0.6 could attract a whale sell-off if the past month’s trend repeats. Whales triggered profit-taking in August when XRP hit the supply zone at $0.6, as illustrated by spikes in Whale-to-Exchange Flow.
Source: CryptoQuant
If the trend repeats, and whales opt for sell-offs again at the level, XRP’s move above the supply zone could be derailed. In such a case, speculators can seek another market re-entry at $0.54 or $0.50 support levels.
However, the bearish thesis could be invalidated if risk markets post a strong rally after the FOMC meeting.
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