Why is the XRP price rising today?

Selling sentiment following the latest Bitcoin halving has been particularly favorable for undervalued XRP.

Ripple price

XRP 0.52 USD

With gains today, Bitcoin ends the day outperforming the broader cryptocurrency market

Bitcoin $63,962 Fourth halving.

On April 20, XRP prices rose 5.55% to an intraday high of $0.526. In contrast, the total cryptocurrency market capitalization fell 0.16%, with BTC prices falling 0.5%.

XRP’s outperformance relative to the rest of the cryptocurrency market today can be attributed to several factors.

Bitcoin “sell the news” sentiment

Bitcoin’s “sell the news” reaction after the halving event favored XRP. The “sell the news” phenomenon typically occurs before an anticipated event occurs, when an asset’s price rises due to speculation, but after the event, the asset’s price falls as traders and investors cash in their gains.

This pattern often leads to a reallocation of capital within the cryptocurrency market, which is the case with XRP today. Given that XRP has lagged behind the market during its 2024 price rally, traders are more interested in buying XRP.

Its year-to-date (YTD) return is -15% as of April 20. On the other hand, the cryptocurrency market has returned +35% over the same period, with Bitcoin growing 44.45%.

Therefore, some investors may view XRP’s current lower price as an attractive investment opportunity. These investors may expect that XRP, which is currently underperforming, may rebound and perform in line with or even outperform the broader market in the future.

XRP whale numbers increase

Today’s XRP price rally has coincided with heavy buying activity from large investors, often referred to as “whales.”

For example, in April (just days before the halving), there was a significant increase in the number of whales holding at least 1 million and 100,000 XRP tokens. The trend is similar for small investors or minnows, with an increase in the number of entities holding at least 10,000 and 1,000 XRP tokens.

Often, this accumulation can signal anticipation of a favorable development or price move as both retail and institutional investors look to benefit from the anticipated market dynamics.

For example, according to CoinShares’ weekly report, the XRP fund was one of the only funds to see capital inflows in the week ending April 12. In contrast, Bitcoin and Ethereum saw negative weekly net flows, as shown below.

Oversold XRP price rebounds

Also from a technical perspective, XRP’s rise today is part of an oversold bounce.

On April 13, XRP price plunged 30%. On the same day, its daily relative strength index (RSI) fell below 30, an oversold zone that usually precedes a rally or consolidation period.

Thanks to this technical rule, XRP’s price has rebounded 24.25% from its April 13 bottom, including today’s gains.