The Current Market Outlook for XRP
XRP has seen a challenging start to the year, with its price dropping roughly 16% since the middle of January. While there has been a small rebound, the coin is still nearly 2% down over the past 24 hours, leaving investors cautious. However, recent data suggests selling pressure is beginning to fade, potentially positioning XRP for a recovery.
Key Indicators Signaling a Rebound
A historically reliable momentum indicator is reappearing, alongside declining on-chain activity and heavily underwater short-term investors—factors that often precede upward price movements.
1. Bullish Momentum Signal: On the daily price chart, XRP is showing a bullish divergence. Between November 4 and December 31, while the price recorded lower lows, the Relative Strength Index (RSI) marked higher lows. This discrepancy, where price weakens but RSI improves, historically suggests that selling pressure is losing its grip. A similar setup previously resulted in a 33% rally for XRP within a week.
On-Chain Activity at a 6-Month Low
Another promising indicator is the collapse of XRP’s coin activity to its lowest point in six months. According to the Spent Coins Age Band metric, XRP transactions across all age bands fell dramatically, from 83 million tokens in mid-January to nearly zero as of January 21. This inactivity suggests a lack of additional selling pressure.
2. Exhaustion Among Short-Term Holders: The Net Unrealized Profit/Loss (NUPL) metric, which tracks whether short-term buyers are in profit or loss, shows significant deterioration. Since January 5, this metric dropped over 680%, indicating short-term holders are heavily in loss territory and are less likely to sell further.
Near-Term Price Predictions
The key resistance level for XRP lies at $2.00, which is a major psychological barrier and a cost basis zone for approximately 1.55 billion XRP. Breaking above this level could mark the beginning of stabilization. Further resistance zones include $2.14–$2.16, containing 1.92 billion XRP, and clearing this range might open the path to higher targets like $2.41, $2.49, and $2.89.
On the downside, a drop below $1.84 could weaken the recovery narrative, with $1.77 as the critical support floor to watch.
Final Thoughts
While market conditions remain unpredictable, the current weakening of selling pressure provides room for cautious optimism among XRP holders. To keep track of such momentum changes, it’s advisable to monitor real-time metrics and market trends closely.
Looking for a reliable trading platform to monitor your XRP investments? Check out Binance—one of the world’s leading platforms for cryptocurrency trading and analysis!
Disclaimer
This article is for informational purposes only and does not constitute financial or investment advice. Always conduct your research and consult with a financial professional before making any trading decisions.
