XRP Signals Rally After 2 Months of Pain

What to Know:

• XRP has surged 25% in two weeks, currently trading near $2.34, fueled by ETF inflows and a recovery from key support levels.
• The broader crypto market is seeing increased institutional interest, reflected in the consistent inflows into XRP ETFs.
• This price movement could indicate renewed liquidity and demand for XRP, but resistance levels and comparisons to Bitcoin and Ethereum warrant caution.

XRP has experienced a notable resurgence, climbing approximately 25% over the past two weeks. This rally follows a period of sustained losses, with the current price hovering around $2.34. The increase in trading volume and market capitalization suggests renewed interest in the token, positioning it as the fourth-largest cryptocurrency by market value.

Price Recovers from Key Support

The recent rally began after XRP tested and held support near the $2 level, a critical area that proved resilient throughout the previous year. This support level prompted a wave of buying activity, driving the price upward and reversing seven weeks of prior losses. The token is now testing the $2.34 to $2.4 range, maintaining short-term bullish momentum.

Technical analysts have noted that this move has cleared several technical hurdles, with the $2.5 level now in focus as the next potential resistance. A successful break above this level could pave the way for further gains toward $2.75. Traders are also closely monitoring the $2.41 level, identified as a “cost-basis wall” where a significant amount of XRP was previously purchased, which could trigger selling pressure from holders looking to break even.

ETF Flows and Supply Dynamics

XRP spot ETFs in the U.S. have recorded substantial inflows, with over $46 million added on Monday alone. These ETFs have experienced consistent inflows since their launch in mid-November, indicating strong institutional demand for XRP exposure. Concurrently, the supply of XRP on exchanges has been decreasing, potentially supporting the price if demand remains robust.

Market Structure and Technical Outlook

While the recent price action is encouraging, some analysts advise caution. One analyst pointed out that while XRP has seen a “strong lift,” its pattern appears “weaker” compared to Bitcoin and Ethereum. The lack of tight consolidation before the move may result in less stable price action. Traders are closely watching whether XRP can sustain a break above the $2.5 mark or if selling pressure will intensify near current levels.

Ripple’s Role and Liquidity Considerations

Ripple’s ongoing developments and partnerships continue to play a crucial role in XRP’s market dynamics. Any positive news or advancements related to Ripple’s technology could further enhance XRP’s liquidity and appeal to institutional investors. The ability of XRP to maintain its upward trajectory will depend on its capacity to attract sustained liquidity and overcome key resistance levels.

Conclusion

XRP’s recent 25% surge, driven by ETF inflows and a recovery from key support, signals renewed market interest. However, traders should remain vigilant, considering resistance levels and the broader market context. The coming weeks will be critical in determining whether XRP can sustain its momentum and establish a new, higher trading range.

Related: XRP ETF Flows Show Highest Inflow in One Month

Source: Original article