XRP's Potential Q4 Rally After a Substantial 90% Drop in Coinbase Reserves
In the cryptocurrency market, Ripple (XRP) is making waves, with signs pointing towards a potential parabolic move in the fourth quarter. This optimistic outlook is supported by a reduction in Coinbase's XRP reserves and a series of other factors.
Coinbase, a leading cryptocurrency exchange, has shed 90% of its XRP reserves over the past three months. The exchange now holds only six cold wallets, totalling 99 million XRP, a significant decrease from the 52 wallets controlling 970 million XRP in June. This reduction aligns with Ripple's 33% spike in July and the subsequent Q3 consolidation within the range of $2.70-$3.15.
The reduced reserves could influence a potential Q4 parabolic move in Ripple, as they may affect market liquidity and price manipulation risks. This is a concern raised by the XRP community, who accuse Coinbase of manipulating XRP supply to suppress the price. It's worth noting that Ripple itself controls nearly half of all XRP coins, with the top 100 wallets controlling 68%. This means that the behaviour of large holders significantly impacts price dynamics.
Despite the weakest quarterly return among the top 5 high-cap coins compared to Solana, smart money appears to be accumulating XRP. This accumulation, observed during the dip, could be a strategic move to keep Ripple underexposed in the market.
Moreover, Ripple's first U.S.-based spot ETF is in the pipeline, which could further fuel interest in the cryptocurrency.
The recent rally in XRP has been highly concentrated, suggesting a potentially controlled setup. XRP's Open Interest, a measure of the total outstanding contracts for a given asset, is under $10 billion, indicating tighter, more controlled positioning. This, coupled with the near-all-time high Open Interest (OI) seen in Solana traders aggressively piling in, could be a sign of a bullish setup for XRP.
Our website flags this controlled setup of XRP as potentially bullish, with the 33% spike in XRP's price in Q3 occurring in July. While other cryptocurrencies like Dogecoin have seen more significant gains for the month, XRP's gains have been more modest, with nearly 100% of its Q3 gains coming in July alone, pushing it to a cyclical high of $3.60.
In conclusion, while the cryptocurrency market remains volatile, the reduction in Coinbase's XRP reserves, smart money accumulation, and the upcoming Ripple ETF could set the stage for a potential parabolic leg in Q4. However, it's important to remember that investing in cryptocurrencies comes with risks, and it's always advisable to do thorough research before making any investment decisions.
Sources: TradingView (XRP/USDT)
