$XRP experienced a significant price rise on August 20, gaining over $9 billion in market capitalization within a single day. This surge was fueled by positive macroeconomic factors, increased risk appetite following short liquidations, and renewed political support for digital currencies.
Specifically, $XRP’s market capitalization jumped from approximately $63.08 billion at 11 a.m. (UTC) on August 19 to $72.27 billion at the same time on August 20, marking a remarkable increase of 14.5%, amounting to nearly $9.2 billion.
During this period, the price of $XRP surged from $0.99 to $1.15, achieving a crucial psychological threshold not reached since July 21, based on data from CoinMarketCap.
What’s Driving the Today’s Rally for $XRP?
The rally of $XRP comes amid potential encouragement from Washington, as former President Donald Trump has urged Congress to endorse the CLARITY Act.
At a White House event attended by major industry leaders, Trump called on lawmakers to expedite the legislation, which is poised to play a significant role in the industry’s future.
“We now need Congress to take the following step by passing a fair version of the CLARITY Act,” Trump stated on August 19.
Additionally, news that the U.S. Treasury would increase its long-term bond buybacks contributed to lowering yields, making riskier assets more attractive. This development sparked a substantial short squeeze, leading to over $1.57 billion in liquidated crypto positions in just 24 hours.
Consequently, Bitcoin (BTC) surged by 11.01%, coinciding with approximately $517 million in net inflows to U.S. spot Bitcoin ETFs recorded on August 10, as reported by SoSoValue. The entire cryptocurrency market capitalization also rose nearly 10%.
Price Predictions for $XRP
With the market in a risk-positive phase, traders are keenly observing whether the token can transition this recent gain into a lasting breakout.
Data indicates that $XRP derivatives traders are predominantly optimistic, with long positions comprising 73.34% of the total trades in the last 24 hours compared to just 26.58% in short positions, according to recent figures from Coinalyze.
This long-to-short ratio showcases significant bullish sentiment, but the heavily skewed positioning may expose $XRP to a long squeeze if the rally loses its steam.
A firm close above $1.13 for $XRP could solidify this trend and bring the Fibonacci extension levels of $1.17 and $1.22 into focus. Conversely, a drop below $1.08, which represents the 38.2% retracement level, would indicate a potential waning momentum.
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