Ripple price (XRP) extends the weekend rebound from a two-month support, up over 2.0% intraday to $2.09 early Monday.
The altcoin’s latest bounce could be linked to fundamental news and on-chain data suggesting increased trader participation and institutional demand as cryptocurrency traders brace for the key week comprising the Federal Reserve (Fed) interest rate decision.
Still, a nine-week-old symmetrical triangle formation joins the key Fibonacci Extension (FE) hurdle to highlight $2.21 as a critical challenge for the buyers.
Let’s dig into the details.
Ripple price action shows traders’ dilemma
Ripple price dropped 5.0% last week, the most among top five cryptocurrencies, as mixed signals from the futures trading market join the broad risk aversion.
With this, the XRP remains on the back foot for the third consecutive month, down over 40% from July’s record high.
Still, the altcoin faces a yearly gain, even with a modest 0.40% upside, as a slew of positive fundamentals favor the Ripple buyers, despite the quote’s latest consolidation within the multi-week symmetrical triangle, stated above.
This shows the market players’ mixed bias surrounding the XRP, as the short-term losses challenge the long-term gains.
Key catalysts affecting the XRP
Be it a jump in the institutional demand or downbeat performance at the futures market, not to forget on-chain clues suggesting stellar network momentum, a slew of factors contributes towards the latest Ripple price action.
Record Network Velocity
During the first week of December, crypto analytical firm CryptoQuant came out with a report suggesting an all-time high frequency of XRP circulation across the network.
“On December 2, the Velocity metric for the XRP Ledger saw a sudden spike, reaching a yearly high of 0.0324. This metric, which measures the frequency of an asset’s circulation across the network, indicates a sharp increase in economic activity and on-chain transactions during this period,” CryptoOnchain mentioned on CryptoQuant.
Although this catalyst doesn’t signal the direction of the XRP, it suggests high liquidity and substantial involvement from traders or significant movements by whales, making the Ripple price vulnerable to market moves.
Trading volume, market cap to lure XRP buyers
Trading volume and market capitalization (market cap) portray increased traders participation and hence validate the quote’s latest strength past the key $2.00 support level. According to Santiment, Ripple’s daily trading volume hit a three-day high of $3.16 billion, while the market cap recovers for the second straight day to $127.32 billion as we write.
Mixed preference of participants
CryptoPotato mentioned that the cohort of wallets holding at least 100 million XRP has shrunk by 20.6% over the past eight weeks, signifying the exit of 569 large wallets. The news also suggested that a reduction in the wallet counts didn’t affect the whale holdings, as they hit a seven-year high of 48.00 billion XRP.
The report also added, “Between December 2 and 3, wallets holding 1 million to 10 million tokens moved or sold 150 million XRP.”
Futures market signals a short squeeze
While the previous two catalysts showed the trader’s indecision and higher liquidity, a slew of posts on X (previously Twitter) highlight heavy short (sell) positions, worth nearly $15 million versus $658K Long (buy), on the futures market as the key reason for XRP’s latest recovery. This raises doubts about the altcoin’s further advances if the sentiment changes.
Ripple CTO’s optimism, XRP listing on OSL Hong Kong
Talking about the reasons that keep the Ripple buyers optimistic, upbeat statements from the Ripple Chief Technology Officer (CTO), David Schwartz, gain major attention. Ripple’s Schwartz signaled in his X post that he is reactivating a hub after multiple years of inaction. These fresh measures bolstered the trader’s confidence in the XRP.
Apart from the Ripple CTO’s optimism, news that a regulated digital asset exchange platform from Hong Kong, OSL Hong Kong, officially launched the XRP also favored the crypto buyers.
“The listing comes as Hong Kong continues to shape its regulatory approach to digital assets, requiring licensed platforms to restrict trading access for certain tokens to institutional or professional market participants. OSL is among the exchanges operating under this framework,” said CoinPedia while conveying the news.
ETF inflows
Strong inflows into the U.S. Ripple (XRP) spot Exchange-Traded Funds (ETFs) also attract the XRP buyers. As per the latest SoSoValue data, the U.S. Ripple (XRP) spot ETFs reported a consecutive 15 days of inflow, with the latest daily figures being $10.23 million. Notably, the XRP’s weekly inflows were $230.74 million during a four-week inflow pattern.
Technical Analysis Teases XRP Sellers
On the technical side, downbeat signals from the Directional Movement Index (DMI) momentum indicator and bearish moving average crossover suggest a short-term weakness in the Ripple price. However, a multi-week symmetrical triangle may restrict the altcoin’s downside.
Ripple Price: Daily Chart Suggests Bearish Consolidation
Ripple price reverses from the bottom line of a nine-week symmetrical triangle, approaching a convergence of the triangle’s top and a 23.6% Fibonacci Extension (FE) of its July-October moves.
However, downbeat signals from the DMI and bearish moving average crossover challenge the XRP buyers.
That said, the DMI’s Downmove (D-, Orange) tops the Average Directional Index (ADX, red) line and the Upmove (D+, Blue) lines, with the D- being closer to the 25.00 neutral limit and hence portraying a slightly bearish directional momentum.
Meanwhile, the 100-day Simple Moving Average (SMA) crossed the 200-day SMA from above during late November and portrayed the bearish moving average crossover.
Still, the XRP sellers need a daily closing beneath the aforementioned triangle’s bottom line, close to the $2.00 threshold by press time, to convince sellers.
Following that, the quote’s south-run towards October’s low of $1.58 can’t be ruled out, with the 38.2% and 50% FE level of $1.90 and $1.66 likely offering intermediate halts.
In a case where the Ripple price remains weak past $1.58, the 61.8% and 78.6% FE levels, close to $1.41 and $1.06, as well as the $1.00 psychological magnet, could attract the sellers.
Alternatively, an upside clearance of the convergence of the stated triangle’s top and the 23.6% FE, near $2.21, can help the XRP bulls attack the stated triangle’s top, close to $2.24 by press time.
Should the XRP manage to offer a daily closing beyond $2.24, the 100-day and 200-day SMA levels, close to $2.55 and $2.61 in that order, could flash on the buyer’s radar ahead of the late October swing high of $2.69.
Above all, the XRP remains on the bear’s list as long as the price stays below a downward-sloping resistance line from early August, near $2.80 as we write.
What Next?
To sum up, network news and on-chain data favor the XRP bulls, but the downbeat performance in the futures market and the altcoin’s inability to cheer an end to a multi-year legal battle, as well as the XRP ETF launch, raise doubts on the quote’s ability to rise further.
Hence, even if the short-term signals are positive, the Ripple buyers will need a strong fundamental catalyst to extend the latest recovery beyond the $2.21 hurdle. This highlights the importance of updates from the Fed and crypto market news for clear directions.
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