A popular cryptocurrency analyst has recently suggested that the native token of the XRP Ledger, $XRP, could soon outperform other alternative cryptocurrencies (altcoins) as it breaks through a key technical pattern.
In a post shared with their over 280,000 followers back in August on the microblogging platform X (formerly known as Twitter), pseudonymous cryptocurrency analyst Blockchain Backer noted that for the first time in its history XRP “shattered the 200-week moving average vs the Altcoin market.”
A moving average is an indicator used in technical analysis to smooth out the fluctuations in the price of an asset over time, and is calculated by taking the average of a certain number of values from the data series. In this case, the 200-week moving average measures the average of the last 200 weekly closing prices of the asset.
Moving averages are used to help identify the trend direction and the support and resistance levels of an asset. The chart the analyst posted a month ago measures XRP against the top 125 cryptocurrencies by market capitalization, excluding Bitcoin.
By pitting the performance of these leading cryptos against XRP, the dip below the 200-week moving average illustrated XRP’s relative strength. Blockchain Backer, however, had anticipated that this downward trajectory would be short-lived, with an impending market pullback that would realign the OTHERS index – the top 125 digital assets – with the 200-week moving average.
Further, the analyst’s model projected that following this recalibration, XRP would mount an even more substantial ascent, diverging further from the broader market.
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Revisiting his forecasts, Blockchain Backer has recently highlighted that the envisaged market pullback has come to fruition. This phase saw the OTHERS/XRPUSD ratio make significant strides towards the 200-week moving average, indicating a period where the leading 125 cryptos surpassed XRP in performance.
Emphasizing the conclusion of the pullback, the analyst remains bullish on XRP’s prospects, envisioning a prominent rally ahead, but he did not specify any exact levels for the cryptocurrency’s potential price surge.
Notably, the e XRP Ledger could soon see its transaction throughput surge from around 1,500 transactions per second to an impressive 3,400 transactions per second (TPS), bolstered by upgrades that are soon set to be deployed.
As CryptoGlobe reported, XRP token holders could soon start being able to earn income on-chain after the highly-anticipated XLS-30d amendment is launched, which is set to introduce a built-in automated market maker (AMM) trading platform into the ledger.
An AMM is a platform that allows for cryptocurrency trading in a permissionless way using liquidity pools, rather than traditional order books. Liquidity pools are shared pools of two or more tokens supplied by users that are used for trades. The prices of tokens within the pool are determined through the use of blockchain oracles.
Investors who add tokens to liquidity pools receive a share of the fees collected from each trade, but the revenue comes with the risk of impermanent loss.
Featured image via Unsplash.
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- Source: https://www.cryptoglobe.com/latest/2023/09/xrp-breaks-out-of-key-pattern-to-outperform-altcoins-says-crypto-analyst/
