XRP, ETF Funding Continues...Battle to Break $1.4 Begins

▲ XRP/AI-generated image

XRP is defending the $1.35 support level and aiming to break through $1.40. With stable capital inflows continuing into XRP spot ETFs, market sentiment has also moved out of the extreme fear zone, reviving short-term rebound expectations.

According to FXStreet on May 25 (local time), XRP is defending the $1.35 support level amidst a broader recovery in the cryptocurrency market driven by expectations of a truce agreement between the US and Iran. FXStreet reported that the US and Iran are moving towards a 60-day truce agreement, which could lead to the phased reopening of the Strait of Hormuz, the end of the blockade of Iranian ports, and a nuclear agreement.

Market sentiment has also improved. WTI crude oil prices fell further below $90, and the Crypto Fear & Greed Index rose from 25 (extreme fear) to 30 (fear) on Monday. FXStreet analyzed that the recovery in investor sentiment supports risk asset preference and moderate price increases.

Institutional investors' demand for XRP spot ETFs also bolstered short-term recovery prospects. According to SoSoValue data, XRP-related funds recorded a net inflow of approximately $22 million last week. The previous week saw $61 million, and the week ending May 8 saw $34 million. FXStreet evaluated that relatively consistent capital inflows support risk asset preference for XRP and increase the likelihood of a sustained rebound.

However, weakening retail investor demand remains a concern. According to CoinGlass data, XRP futures open interest decreased to $2.83 billion on Monday, down from $2.91 billion the previous day. Analysis suggests that a continued contraction in the derivatives market could signal a lack of confidence in XRP's ability to sustain its upward trend, and traders may focus on liquidating existing positions rather than opening new ones.

The technical trend is also still far from a complete bullish reversal. XRP remains below approximately $1.40, where the 50-day exponential moving average is located, facing short-term bearish pressure. The Bollinger Bands midline is around $1.41, the 100-day exponential moving average is at $1.47, and the 200-day exponential moving average is at approximately $1.68, all acting as overhead resistance.

Momentum indicators also lean towards caution. The Relative Strength Index rebounded from a low of 38 last week but remained around 45 on the daily chart, failing to cross the 50-line. The MACD histogram also remains in negative territory. FXStreet analyzed that this combination suggests selling pressure could persist with every price rebound.

On the upside, the 50-day exponential moving average at $1.40 and the Bollinger Bands midline around $1.41 are considered the first resistance levels. Subsequently, the 100-day exponential moving average at $1.47, the upper Bollinger Bands around $1.49, and the 200-day exponential moving average at $1.68 are presented as successive resistance levels. On the downside, the short-term demand zone at $1.35 is the first support, and a break below the lower Bollinger Bands around $1.32 could deepen the downward pressure. XRP has entered a decisive battleground between ETF capital inflows, slowing derivatives demand, and the $1.35 support and $1.40 resistance levels, which will determine its short-term direction.

*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.*