Amid Conflicting Long and Short Signals, Can XRP and Stellar Break Resistance and Rebound?

▲ XRP, Stellar (XLM)/AI-generated image ©

As investor confusion intensifies regarding the direction of the virtual asset market, XRP (Ripple) and Stellar (XLM) are engaged in a fierce tug-of-war ahead of breaking through key resistance levels. Bullish and bearish signals are conflicting in on-chain data and the derivatives market, leading to a tense market where a clear direction is yet to be found.

According to investment specialized media FXStreet on May 5 (local time), on-chain data from virtual asset analytics platform CryptoQuant presented a neutral or somewhat positive outlook for both assets. In XRP's spot market, a buying dominance emerged as the fervor cooled, hinting at potential upside, while XLM also showed dominant buying pressure in an overall neutral environment, sending a moderate bullish signal.

Indicators in the derivatives market reflect an even more mixed investor sentiment. According to CoinGlass data, XRP's and Stellar's long-short ratios were 0.95 and 0.77 respectively, both below 1, indicating a dominant bearish sentiment betting on a decline. However, the open interest-weighted funding rates for XRP and XLM were both positive at 0.0015% and 0.0052% respectively, simultaneously presenting a contradictory bullish signal where long position investors are paying fees, anticipating a rise.

Currently trading around $1.40, XRP's upside is limited as it has failed to surpass its 50-day exponential moving average (EMA) of $1.40. The Relative Strength Index (RSI) on the daily chart has just crossed above 50, and the Moving Average Convergence Divergence (MACD) remains in negative territory, indicating a lack of strong rebound momentum. On the upside, the 100-day EMA at $1.50 and the upper boundary of the descending channel at $1.53 will act as key resistance levels. On the downside, if the $1.30 support level breaks, there is a risk of a fall to $0.72.

Stellar, currently pausing around $0.158, is also trapped below its key exponential moving averages, maintaining a short-term bearish bias. The RSI shows subdued demand around 43, and the MACD is also in negative territory, suggesting persistent downward pressure despite recent stabilization. In the short term, it needs to overcome resistance levels at $0.165 and $0.176 to target the Fibonacci retracement zone at $0.201. On the downside, it will face strong support tests around the previous trendline at $0.139 and $0.136.

In conclusion, both XRP and Stellar are navigating through a dense fog of mixed bullish and bearish signals. Experts analyze that given the absence of a clear direction in on-chain indicators and the derivatives market, a strong wait-and-see sentiment is likely to continue in the short term, cautioning against premature directional predictions until a breakthrough of key resistance levels is confirmed.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*