XRP Dips, Traders Eye Key $1.90 Support

What to Know:

• XRP is navigating a period of increased volatility following the latest Federal Reserve policy meeting, with traders closely monitoring the $1.90 support level.
• Technical indicators present a mixed outlook, with the Relative Strength Index (RSI) in compression and the Stochastic RSI signaling oversold conditions, potentially setting the stage for a reversal if key support holds.
• Despite a recent dip in network activity, XRP ETFs have seen substantial inflows, indicating sustained institutional interest even as large holders have reduced their positions.

XRP is currently trading near $2.01, facing headwinds amid broader market uncertainty triggered by recent Federal Reserve policy announcements. This environment has led to increased short-term volatility, prompting both retail and institutional traders to focus on critical support levels. The ability of XRP to maintain its footing around the $1.90 mark will likely dictate near-term price action and investor sentiment.

At press time, XRP reflects a 4% loss over the last 24 hours and nearly 8% down on the week. The price remains confined within a multi-month trading range, bounded by support near $1.90 and resistance around $3.60. Multiple attempts to breach the $2.1 level have been met with strong selling pressure, underscoring the challenges XRP faces in establishing a sustained upward trajectory. This range-bound behavior is typical during periods of market indecision, as traders await clearer signals before committing to directional plays. We’ve seen similar patterns in other assets, like Bitcoin in early 2023, where a defined range preceded a significant breakout.

Technical analysis paints a mixed picture. According to ChartNerd, the Relative Strength Index (RSI) is in a compression phase with a reading of 39, suggesting weak momentum but not yet oversold conditions. Conversely, the Stochastic RSI is in oversold territory and has exhibited a bullish crossover, hinting at a potential reversal if the $1.90 support holds firm. This divergence in indicators highlights the current market’s lack of conviction and the importance of monitoring price action in conjunction with technical signals. Seasoned traders often look for confluence between multiple indicators to increase the probability of their trades, and the current setup in XRP requires a cautious approach.

The broader market context, particularly Bitcoin’s performance, also plays a crucial role. As noted by CRYPTOWZRD, XRP’s recent bearish movement mirrored Bitcoin’s decline following the FOMC meeting. The sentiment is that once Bitcoin establishes a stable support level and market panic subsides, XRP is poised to recover. Bitcoin dominance remains a key metric to watch; a decrease in Bitcoin’s dominance could allow altcoins like XRP to regain strength. Currently, $2 is viewed as a critical short-term support, while $2.3 acts as the next major resistance. A break below $2 could pave the way for a test of the $1.90 support, a level that has historically proven significant.

On-chain data presents a nuanced view of XRP’s market dynamics. Steph Is Crypto pointed out that XRP network activity has decreased to 37,088 active addresses, the lowest in three months. This decline contrasts with the robust inflows into US spot XRP ETFs, which have recorded over $190 million in inflows over the past week without any outflows, signaling continued institutional interest. The divergence between retail activity and institutional investment suggests a potential shift in market participants, with institutions accumulating XRP while retail interest wanes. A similar trend was observed in gold ETFs during periods of economic uncertainty, where institutional inflows often offset retail selling pressure.

Further analysis reveals that exchange supply has also decreased, with holdings falling to 2.6 billion tokens. Over the past two months, more than 1.35 billion XRP has been moved off exchanges, potentially indicating a shift towards longer-term holding strategies. However, it’s worth noting that large holders reportedly sold over 500 million XRP, worth over $1 billion, in a single week, according to CryptoPotato. This selling activity by large holders could exert downward pressure on the price, at least temporarily. Market participants should closely monitor these large transactions, as they can provide insights into the sentiment and strategies of significant XRP holders.

In summary, XRP is currently navigating a complex landscape influenced by macroeconomic factors, technical indicators, and on-chain data. While short-term volatility and range-bound trading are likely to persist, the continued institutional interest, as evidenced by ETF inflows, provides a potential tailwind. The key level to watch remains the $1.90 support, as its ability to hold will likely determine the near-term trajectory of XRP. As always, investors should conduct thorough due diligence and consider their risk tolerance before making any investment decisions.

Related: Crypto Funds See $500M Outflows

Source: Original article