Rising Interest In XRP

Recently, XRP reached the top of trading volume on Coinbase, one of the most popular exchanges in the US. For the first time, it overtook Bitcoin from the top spot in terms of daily trading volume.

However, Bitcoin (BTC) remains the most-traded cryptocurrency on Binance, the world’s largest exchange by volume, even though it does not open its services to those in the United States. The surge in XRP trading volume aligns with increased demand for XRP in the US, as predicted by on-chain indicators a week ago.

XRP is closely associated with Ripple, a blockchain payment network. The potential approval of a spot XRP ETF in the US is another reason for the surge in XRP trading volume.

XRP has been one of the biggest gainers since Donald Trump’s victory at the US presidential polls last November. Interest in the coin increased after Brad Garlinghouse (Ripple’s CEO) met with the incoming president earlier this month.

At the time of writing, XRP/USD and BTC/USD rank first and second in trading volumes on Coinbase. The former accounts for 25% of the exchange’s trading volume, while the latter accounts for 20%.

Bitcoin Exchange Reserves Hit Seven-Year Low

In addition, on-chain data showed that Bitcoin’s supply on exchanges has reached a seven-year low of 2.4 million BTC. This reduction in available supply is notable as it is often a precursor to BTC’s price rally.

When the reserve is low, fewer BTCs are available for instant trading, creating upward pressure on its price. This could be why BTC’s price broke new resistance levels to trade above $100,000.

The current market structure suggests that Bitcoin may be on the verge of posting a serious upward price increase. While the dynamics in the Bitcoin market point to a possible rally, it is important to note that this imbalance between supply and demand can also lead to increased volatility.

A Growing Shift Towards Long-Term Bitcoin Holdings

The decline in BTC’s supply on exchanges suggests that investors prefer long-term storage of their coins to trading them on exchanges.

On-chain analytics indicate that the number of addresses holding more than $100,000 in BTC continues to rise, indicating that large investors (whales) hold their crypto assets for the long term.

It is worth noting that the number of long-term holders will increase further as mainstream BTC adoption grows.

Technical Indicators and BTC’s Price

Technical indicators show that the market’s outlook remains bullish. It has broken through critical resistances, such as the 50-day Exponential Moving Average (EMA).

These indicators have identified $110,000 as the coin’s next crucial resistance. If the factors sustaining BTC’s bullish trend fail to hold, there could be a broader market sell-off, and the leading cryptocurrency will find support at $97,000

However, many analysts predict that the coin’s price rally continue due to growing investor interest in Bitcoin-related products. BTC currently trades above $105,000, its highest price level since the start of this year.

This price represents an almost 11% gain in the last seven days. Meanwhile, a recent study shows a significant divergence between BTC’s price and VC investment activity.

The study revealed over 2,150 blockchain funding rounds last year, with investors investing a combined $11.5 billion into these funding rounds. However, this amount was significantly lower than that of 2021 and 2022. However, industry experts predict a rise in crypto funding deals this year based on multiple macroeconomic conditions.

BTC’s recent gains have coincided with the rise in the stocks of crypto-related firms. The largest corporate BTC holder, MicroStrategy (MSTR), gained 8% within the last day, while Coinbase’s stock (COIN) rose by 4.9%.

The stock price of MARA Holdings (a popular BTC mining firm) recorded the largest percentage gains among BTC miners, at almost 9%.