Why is the XRP price rising today?

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

The price of Ripple

XRP$0.52

rallied today, outperforming the broader cryptocurrency market a day after Bitcoin

Bitcoin$63,962

saw its fourth halving.

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

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

Bitcoin’s “sell the news” sentiment after the halving event

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 the market during its 2024 price rally, traders are more interested in buying XRP.

As of April 20, its year-to-date (YTD) return was -15%. On the other hand, the cryptocurrency market returned +35% during the same period, with Bitcoin growing 44.45%.

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

XRP Whales on the Rise

Today’s XRP price rally has coincided with significant 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, such accumulation can signal anticipation of favorable developments or price moves as both retail and institutional investors look to benefit from anticipated market dynamics.

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

Oversold XRP Price Rebound

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

On April 13, XRP’s price plunged 30%. On the same day, its daily relative strength index (RSI) fell below 30, an oversold area that typically precedes a rebound or consolidation period.

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