XRP (CRYPTO: XRP) is up 40% over the past week, sparking debate over whether the move is a short squeeze or the beginning of a much larger crypto expansion.
Short Squeeze? Price Will Tell
Analyst Cryptoinsightuk said in an X post on Friday that he had spent months advocating dollar-cost averaging XRP around its lower trading ranges. He described recent levels as one of the strongest accumulation opportunities he had seen in years.
But after the latest rally, he questioned whether the move has enough underlying strength to develop into a sustained trend.
“Is this just a short squeeze?” the trader asked, adding that it “very much could be” until price action provides further confirmation.
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He pointed to expanding global money supply, unconventional monetary policy and geopolitical tensions as potential ingredients for a major repricing.
Even if crypto’s long-awaited utility phase does not arrive yet, Cryptoinsightuk argued that greater liquidity alone could drive substantially higher prices.
XRP Flashes 3 Unusual Signals
Santiment’s Aug. 20 weekly anomaly report highlighted an unusual convergence in XRP activity.
XRP was the only cryptocurrency among Polygon, OK and Polkadot to trigger three separate signals, social dominance spike, project in trends and old coins moved. All the three converged on Aug. 17.
XRP’s trend score surged to 293.64, more than double Bitcoin’s 143.61 peak for the week. Social dominance also spiked while sentiment dropped to -1.85, the most negative reading among the assets.
More notably, roughly 1.1% of XRP’s circulating supply moved after remaining untouched for an average of about 519 days.
Despite the large dormant-token movement, XRP exchange volume stood at $928.9 million, below its recent range of roughly $1 billion to $1.6 billion.
Santiment said the lack of abnormal exchange volume suggests the old coins were more likely transferred between wallets than immediately sold.
Meanwhile, institutional demand had weakened before the latest rally. Weekly net inflows into U.S. spot XRP funds plunged 93% to just $1.01 million for the week ending Aug. 8.
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