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▲ XRP/AI Generated Image
XRP is barely holding above the $1.35 support line, but its upward potential is limited due to a combination of slowing derivatives demand and resistance from key moving averages.
According to financial media outlet FXStreet on May 26 (local time), XRP rebounded above $1.35 as of Tuesday's writing. However, the broader cryptocurrency market remained in an attempt to stabilize amid volatility following increased tensions in the Middle East after the US attack on southern Iran. FXStreet reported that demand for risk assets, including XRP, cooled as hopes for a peace agreement between the US and Iran weakened.
US Central Command spokesperson Tim Hawkins stated that the attack was “a measure to defend our troops while maintaining restraint during the ongoing ceasefire.” The Iranian Revolutionary Guard claimed Iran has a “legitimate and clear” right to defense in response to the US ceasefire violation. US Secretary of State Marco Rubio told BBC that “we will see if progress can be made. There is a lot of discussion over the specific wording of the initial document, so it will take a few days.”
Demand for XRP derivatives was also not strong. According to Coinglass data, XRP futures open interest averaged $2.85 billion on Tuesday, a slight increase from $2.83 billion the previous day. However, this is a low level compared to the trend that surpassed $3 billion in mid-May and the all-time high of $10.94 billion recorded in July. FXStreet analyzed that investors are reluctant to open new positions due to a lack of confidence in XRP's short-term bullish outlook, making it vulnerable to broader crypto market volatility.
The technical trend is also limited. XRP is consolidating below the 50-day exponential moving average (EMA) at $1.40, the 100-day EMA at $1.47, and the 200-day EMA at $1.68. The daily Relative Strength Index (RSI) remained around 43, and while the negative histogram of the Moving Average Convergence Divergence (MACD) has shrunk, it suggested that bearish pressure has not yet dissipated.
On the upside, the 50-day exponential moving average (EMA) at $1.40 was presented as the first resistance level. For XRP to alleviate short-term downward pressure and attempt a recovery towards the 100-day EMA at $1.47 and the 200-day EMA at $1.68, it needs to close a daily candle above this range. On the downside, the Supertrend indicator provides the first major support at $1.33, and a break below this level would further strengthen the current bearish structure and increase the potential for further losses.
*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.*
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