Blockchain News

XRP Short Traders could be on Seventh Heaven and this is why

Surangel Whipps Jr, the president of Palau, confirmed the country’s plans to collaborate with Ripple on the launch of a national stablecoin in a recent interview with Bloomberg.

According to Whipps Jr., the launch of a national stablecoin is part of the country’s efforts to build a digital economy. Furthermore, the plan was part of the company’s strategy to increase the number of digital visitors to the country.

While many countries have launched Central Bank Digital Currencies [CBDCs], Whipps Jr explained that Palau chose the stablecoin route due to the island’s lack of a central bank.

Whipps Jr. explained why Palau decided to launch a stablecoin:

“In developing our collaboration with Ripple, our goal is to have a USD-backed stablecoin, which is really a step toward our own Central Bank Digital Currency, you could say. We feel that this is important and it will help make Fiat on ramping easier. Our digital residents will also have banking access, and through Binance Pay options will make offering easier too. We really believe that they don’t compete, but they actually are symbiotic, and they can help each other and strengthen the crypto ecosystem.”

The news of the collaboration resulted in a positive price rally for XRP, with the alt’s value increasing by 5% in the last 24 hours. According to CoinMarketCap data, the rally has placed XRP among the top five cryptocurrency assets with the most gains.

Similarly, with $954 million in XRP tokens traded in the last 24 hours, the alt had its highest daily trading volume in the last week, according to Santiment data.

A four-hour performance analysis of XRP revealed increased token accumulation. Day traders were seen taking advantage of the partnership news to profit on short-term trading positions.

The dynamic line (green) of XRP’s Chaikin Money Flow (CMF) was 0.13 at the time of writing. A CMF value greater than zero usually indicates market strength.

Despite returning a positive value, the CMF made lower lows. Other key indicators, including the Relative Strength Index (RSI) and the Money Flow Index (MFI), have reached overbought levels. This suggested that a sell-off was on the way. Furthermore, buyers would become exhausted and would be unable to sustain further price increases.

Furthermore, at press time, the RSI and MFI key indicators were at 71.20 and 77.68, respectively. This meant that XRP was overbought. However, such highs are usually followed by a reversal as profit-takers overrun the market.


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