XRP Recovers $1.40, Will It Break Major Resistance and Start a Full-Fledged Rebound Rally?

▲ XRP/ChatGPT generated image ©

Despite geopolitical tensions in the Middle East, XRP (Ripple) is gradually gaining upward momentum, having recovered the $1.40 level. With the resumption of capital inflows into spot exchange-traded funds (ETFs) and an overall improvement in investor sentiment, market attention is focused on whether it can break through key technical resistance levels and embark on a full-fledged upward rally.

According to investment media FXStreet on May 5 (local time), XRP is trading above $1.40, showing a gradual upward trend in line with the overall rally in the virtual asset market. Notably, it demonstrated remarkable resilience even as the conflict in the Middle East intensified, with the US-Iran truce agreement facing serious threats. The Crypto Fear & Greed Index rose from 40 to 50 the previous day, moving out of the fear zone, indicating that investors' preference for risk assets is stabilizing.

While interest in virtual asset spot ETFs is somewhat mixed, investors maintain cautious optimism from short-to-medium-term perspectives. On Monday, a small inflow of $3.87 million into US-listed XRP spot ETFs wiped away Friday's sluggish performance. This brought the cumulative inflow to $1.29 billion and net assets under management to $1.07 billion. Experts analyzed that these steady capital inflows are key factors in maintaining positive market sentiment and increasing the potential for an upward trend.

In the derivatives market, individual investor participation remains stagnant. On Monday, XRP perpetual futures open interest slightly increased from $2.5 billion the previous day to $2.54 billion. This stands in stark contrast to July, when open interest surged to $10.94 billion when XRP reached an all-time high of $3.66. This suggests that active market participation from individual investors is absolutely necessary for a sustained and explosive price increase.

From a technical perspective, XRP remains below the clustered exponential moving averages, not fully escaping a short-term bearish bias. It is slightly below the 50-day EMA of $1.41 and shows a significant gap from the 100-day and 200-day EMAs of $1.51 and $1.74, respectively, indicating that an immediate sharp rally is limited. However, the daily chart's Relative Strength Index (RSI) recorded 52, showing a positive trend, and the Moving Average Convergence Divergence (MACD) histogram is also contracting in the negative territory, indicating that downward pressure is gradually weakening.

For a full trend reversal, XRP must firmly break through the first resistance level of $1.41 and the $1.51 zone where the 100-day exponential moving average is located to open the path for an ascent to $1.74. Conversely, on the downside, the daily low of $1.39 acts as an immediate defense line, and if this level breaks, the media predicts that strong support will be tested around the monthly open of $1.37.

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