Throughout the previous month, Ripple [XRP] experienced an upward trend, influenced by the aftermath of the U.S. presidential election, which positively impacted the entire cryptocurrency market. The potential for Ripple to benefit from enhanced regulatory clarity might be one explanation for the recent surge in capital inflow and investor confidence.
Recently, Ripple CEO Brad Garlinghouse announced on X (previously known as Twitter) that the regulatory approval for the company’s stablecoin has been secured from the New York Department of Financial Services.
The launch of RLUSD, the long-awaited stablecoin from Ripple, aims to tap into a segment of the stablecoin market estimated to reach nearly $3 trillion in the next five years, from its current value of $200 billion.
Following this development, XRP has seen a 23% increase from its recent low, raising optimism among investors and traders.
Diminished Momentum Post Rejection at $2.9
After a breakout from its range a month ago, XRP surged by 315% in less than three weeks. However, subsequent to reaching a local peak at $2.9, XRP retraced by 19.41% and is currently hovering above the $2.2 support level.
The Relative Strength Index (RSI) has been forming lower peaks in tandem with the price movement, indicating a decline in momentum. Although the daily RSI remains above the 50-neutral mark, suggesting a prevailing bullish sentiment, the market structure is at risk of switching to a bearish stance.
A conclusive daily close below $2.17 could signal a structural shift. The On-Balance Volume (OBV) is currently encountering resistance after the recent sell-off, hinting at a potential downward trajectory for XRP in the near future.
Potential Resistance and Price Attraction beyond $2.5
While the recent rebound from $1.9 is promising, it may not signify an immediate reversal in trend. It’s more likely that XRP is seeking liquidity and preparing for its next significant upward movement, requiring some time to materialize.
The $2.66-$2.72 range is anticipated to face testing in the upcoming week before a short-term bearish phase sets in. The liquidation heatmap on the 3-day chart highlights the $2.45-$2.5 zone as a substantial short-term barrier, with $2.7 also displaying significant liquidation levels.
Considering the liquidation thresholds across various periods, the $2.5-$2.7 range is expected to pose strong immediate resistance. A rejection from this level, resulting in a drop below $2, seems probable. Conversely, a daily closure above $2.7 and subsequent validation of $2.5 as support would suggest XRP is poised for its next upward move.
Disclaimer: The views expressed in this article are opinions and should not be construed as financial, investment, or trading advice.
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