Ripple’s native token, XRP, is trading at its lowest point in the past week. As of this writing, the altcoin exchanges hands at $0.53, noting an additional 3% price drop over the past 24 hours. 

However, BeInCrypto’s assessment of XRP’s technical setup suggests that this decline is only temporary, and the altcoin may soon experience a rebound. Here is why.

Ripple’s Selling Pressure Begins to Weaken

Despite its price decline, XRP’s Chaikin Money Flow (CMF) has maintained an uptrend over the past few days. This indicator measures an asset’s buying and selling pressure over a specified period. As of this writing, it sits at -0.10, attempting to cross above the zero line.

As in XRP’s case, when its Chaikin Money Flow (CMF) is negative but trending upward while the price declines, it indicates the asset is still under net distribution, meaning there is overall selling pressure. However, the decreasing intensity of this selling suggests the bears are weakening, and bullish interest is starting to build.

Read more: Everything You Need To Know About Ripple vs SEC

XRP’s positive funding rate, which stands at 0.01% at press time, reflects the bullish bias that the altcoin enjoys despite the dip in its value. 

The funding rate is a periodic fee used to keep the price of a perpetual futures contract aligned with the spot price of the underlying asset. When the funding rate remains positive even as the asset’s price drops, it signals that most traders are still bullish, betting on a price recovery despite the ongoing decline.

XRP Price Prediction: A Seven-Month High is at Hand 

XRP is currently trading at $0.53, holding just above a key support level of $0.52. A resurgence in bullish sentiment could drive renewed demand for the altcoin, potentially triggering a rebound.

Should this happen, XRP’s price may attempt to break through resistance at $0.65. If successful, the token could rally further, eyeing its seven-month high of $0.74.

Read more: Ripple (XRP) Price Prediction 2024/2025/2030

However, if the downward trend persists, the bulls may be unable to defend support at $0.52, and XRP’s price may drop to $0.38, invalidating the bullish prediction above. 

BitFuFu, a cloud miner partnered with Bitmain, acquired an 80-megawatt Bitcoin mining facility in Ethiopia. This purchase is part of an overall strategy shift from BitFuFu, with more global presence and direct asset ownership.

The Grand Ethiopian Renaissance Dam (GERD) is Ethiopia’s most popular destination for miners, but BitFuFu has not confirmed the site will be here.

BitFuFu’s Ethiopian Strategy

BitFuFu, a Singapore-based cloud mining company partnered with Bitmain, announced in a press release the acquisition of an 80-megawatt Bitcoin mining facility in Ethiopia. Bitmain, an early investor in BitFuFu, has been significantly expanding its Bitcoin mining investments this year. According to the press release, BitFuFu is “Bitmain’s sole strategic partner in the cloud mining space.”

Read More: BitFuFu Review 2024: A Guide to The Cloud Mining Platform

This facility will be a substantial expansion to BitFuFu’s mining capabilities. Before this, most of BitFuFu’s infrastructure was based in the United States and hosted by third-party providers. The new facility will boost BitFuFu’s capacity by 13%, aligning with the company’s shift from an “asset-light” strategy to owning a more diversified portfolio of mining assets.

“This acquisition is a critical milestone as we work to vertically integrate and transition towards a more diversified and resilient portfolio of Bitcoin mining sites. As we integrate this facility into our global infrastructure, we can capitalize on lower energy costs to reduce Bitcoin production expenses, expand our operational capacity, and enhance profitability,” said CEO/Chairman Leo Lu.

Ethiopia has emerged as a popular destination for Bitcoin miners in recent years, particularly attracting investment from Chinese firms following China’s 2021 mining ban. The key draw for these investments is the Grand Ethiopian Renaissance Dam (GERD), a vast hydroelectric facility that offers ample power supply, making it appealing for Bitcoin mining operations.

Despite the Grand Ethiopian Renaissance Dam (GERD) being a growing hub for international mining in Ethiopia, BitFuFu has not confirmed that its new facility will be located there. Given Ethiopia’s limited electrical grid, GERD seems like the most viable option for large-scale mining operations. Additionally, with BitFuFu’s strong business ties to Chinese firm Bitmain, the connection to GERD appears likely, though the company has yet to officially disclose the location.

Read More: The Best Countries to Mine Cryptocurrency in 2024

In any case, this major acquisition in Ethiopia will significantly boost BitFuFu’s global presence and strengthen its competitiveness in international markets. While the company’s press release did not reveal the price of the new facility, the purchase is positioned as the first step in a broader strategic expansion.

“Moving forward, we aim to strengthen our global position by acquiring or building additional facilities and drive further innovation in the digital asset mining sector while delivering long-term value to our shareholders,” Lu stated.

HashKey Capital remains optimistic about altcoins, taking cues from the ongoing Bitcoin boom. Their bullish stance is based on a mix of market analysis, strategic investments, and economic factors that suggest strong potential for low-cap tokens.

At the same time, Bitcoin (BTC) continues to perform well, with the $70,000 milestone within reach. Should positive sentiment lead to capital flowing into altcoins, Ethereum and Solana are expected to be the primary beneficiaries.

HashKey Capital Eyes Market Potential for Altcoins

The investment firm has articulated its bullish outlook in a recent Medium post. It outlined the strategic rationale behind its focus on altcoins amid changing market outlook and investor sentiments. Specifically, HashKey Capital has identified a critical shift in investor behavior, citing an increasing demand for diversified portfolios that extend beyond Bitcoin and Ethereum.

Growing Institutional Interest

The post emphasizes that the increasing institutional interest in cryptocurrencies serves as a strong catalyst for the growth of altcoins. It highlights the growing narrative around cryptocurrencies as major financial players and asset managers become more involved in the digital asset space.  

Further, institutions are looking beyond Bitcoin and Ethereum, considering altcoins as viable investment vehicles. Among them is Bitwise, which recently revised its XRP ETF (exchange-traded fund) filing. Others, like Grayscale, are pivoting their trust funds to altcoins such as Aave, Sui, and XRP.

Read more: 10 Best Altcoin Exchanges In 2024

According to Jupiter Zheng, HashKey Capital’s partner of liquids funds and research, professional investors are eager to explore altcoin opportunities. Due to their lower market capitalization and growth potential​, these tokens have historically provided substantial returns.

Changing Market Conditions

HashKey Capital’s optimism is also grounded in favorable market conditions. Recent trends indicate that cryptocurrency markets are stabilizing, aided by improved liquidity and shifting macroeconomic conditions. The firm points to signs of a market bottoming out, which, coupled with the potential easing of US interest rates, is seen as a favorable environment for altcoin investments.

“The peaking of US interest rates combined with improved liquidity in the crypto market creates an ideal environment for investors to explore altcoins,”​ Zheng noted

The increase in applications for spot crypto ETFs (exchange-traded funds) also reflects a growing acceptance and normalization of digital assets. For instance, Nashville-based investment firm Canary Capital filed for a Litecoin ETF, which further enhances the investment avenue for altcoins.

Regional Regulatory Boost

Another key component of HashKey Capital’s bullish outlook on altcoins is the supportive regulatory environment. Hong Kong is a key focus for the asset manager, given that it is based there. The region has made significant strides in establishing a strong framework for digital assets.

This has attracted institutional interest and provided a favorable atmosphere for crypto investments, with the likes of Animoca Brands exploring a possible IPO (initial public offering) in Hong Kong or the Middle East. The regulatory clarity is expected to facilitate greater adoption of altcoins and pave the way for new projects to emerge​.

As HashKey navigates this regulatory playing field, its focus on altcoins aligns with the broader trend of institutional players entering the market. This influx of capital and expertise is anticipated to drive innovation and create new investment opportunities within the altcoin space​.

Diversification Strategy

Nevertheless, HashKey Capital’s strategy goes beyond capitalizing on market trends. It is also about prudent risk management through diversification. The firm plans to allocate less than 50% of its funds to Bitcoin and Ethereum, allowing for greater exposure to smaller-cap cryptocurrencies. This strategic allocation aims to optimize risk-return profiles by tapping into the potential of various altcoin projects.

The selection criteria prioritize projects that exhibit strong fundamentals and novel approaches. Taken together, the asset manager’s altcoin pivot highlights an understanding of market inefficiencies. Smaller market cap-sized cryptocurrencies often experience higher volatility, but they also provide opportunities for outsized returns. By strategically investing in a range of altcoins, the crypto investment firm seeks to balance risk while pursuing substantial upside potential.

Read more: 11 Cryptos To Add To Your Portfolio Before Altcoin Season.

HashKey Capital’s expression of bullishness on altcoins is timely, coming along with analysts’ expectation that the colloquial “alt season” is near sight. As BeInCrypto reported, the Altcoin Season Index has dropped to its lowest level since early September, signaling a potential shift. Nevertheless, some are also skeptical about an altcoin season happening, given Bitcoin’s prevailing dominance.