Despite the market depression, XRP has something interesting for investors
- XRP giving hidden signals
- Ethereum breaks a record
Bloodlust bears have returned to the market as the majority of investors crumble in fear following rumors of potential insolvency at Genesis, a subsidiary of Digital Currency Group. Most assets have fallen further into a downtrend since assets like ADA and XRP are testing their local lows despite the most recent bounce.
XRP giving hidden signals
Taking a quick look at the XRP chart, the most obvious diagnosis would be a strong downtrend, with gradually increasing selling pressure pushing the price of the asset to a 1-year low.
However, there is a hidden chart pattern that formed only a few days ago: an ascending triangle. Whenever the technical analysis pattern occurs on the chart, the break up should be expected for the foreseeable future.
Unfortunately, the positive move would be impossible without market support, which has mainly dragged XRP down along with other alternative cryptocurrencies despite technically being in the local uptrend.
Ethereum breaks a record
Unfortunately, the record we are talking about has nothing to do with the price performance of the second largest cryptocurrency in the market. According to on-chain data, the net flow of Ethereum on exchanges has reached a value the market has not seen in five years: -42,273.066 ETH.
The metric measures the amount of coins entering and leaving centralized exchanges. Whenever the net flow turns negative, the market loses liquidity and funding as trading platforms have no choice but to empty their hot and cold wallets to cover pullback waves.
The previous 5-year low of -35,979.104 ETH was seen on January 05, 2019
— glassnode alerts (@glassnodealerts) November 21, 2022
Previously, on-chain data for Bitcoin showed investors actively moving funds to self-custody instead of keeping them on centralized cryptocurrency exchanges. The reason behind this is obviously the FTX crash which undermined market confidence in CEX in general.
In order to sort out the situation one way or another, the exchanges said they would release proof of reserve to prove their solvency and resilience in the event of an unusual spike in outflows. Technically, FTX’s inability to cover withdrawals was the main reason for its implosion. However, some experts claim that even without a massive increase in withdrawals, the exchange is doomed.
From a market performance perspective, Ethereum is struggling to bounce off the 2022 low and is trading, for now, around the price level we saw on November 10th. November 10 is when Alameda and FTX sold huge volumes of ETH in the market, while trying to get as much liquidity as possible in a short time.
As of press time, ETH price movement has stabilized and it has consolidated at the $1,110 price level without attempting to break higher.