XRP is currently trading above the $2 mark, but this price action has yet to definitively signal a bullish trend reversal. According to market analysts, stronger technical validation is anticipated at higher price points.
Key developments indicate potential for continued price stability and possible upward movement:
- •XRP successfully reclaimed its 50-day moving average in early January, suggesting preliminary signs of a trend reversal.
- •Last week saw the highest inflows into XRP investment products compared to the broader digital asset market, which experienced significant outflows.
- •On-chain volume metrics suggest that XRP's move above $2 is supported by balanced market participation rather than excessive speculation.
XRP Investment Product Inflows Bolster Price Stability
The beginning of January saw XRP re-establish a bullish position above its 50-day simple moving average (SMA). This technical development is characteristic of a classic downtrend retest, which can lead to further price appreciation if buyers maintain control of the market. However, current price action indicates stabilization rather than rapid acceleration.
This price stability appears to be further supported by the activity of institutional investors. While the overall digital asset market faced one of its most challenging weeks since mid-2023, with approximately $454 million in outflows, XRP's price trajectory moved in the opposite direction.
Data from CoinShares revealed that XRP experienced weekly inflows totaling $45 million. This represents a significant increase of over 400% compared to the previous week, standing in stark contrast to the broader market's outflow trend.
This divergence has been instrumental in helping XRP maintain its position above $2, even as liquidity conditions tightened across other digital assets. This suggests that XRP's recent strength is not solely driven by market sentiment.
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Volume Data and Trader Outlook Shape Market Range
On-chain data from CryptoQuant provides additional insights into XRP's market dynamics. The Trading Volume Z-Scores on Binance are currently hovering around 0.44. This indicates trading activity that is slightly above the 30-day average, positioning it within a neutral range.
This observation suggests that XRP's current price movement is not being propelled by speculative trading. Instead, it indicates a balanced interplay between buyers and sellers, a condition often seen during accumulation phases in the market.
In parallel, market analyst CrediBULL noted that a completed "triple tap" pattern at the range highs presents two potential scenarios: a pullback towards the $1.77 level within a larger uptrend, or the establishment of a defended base around $2 where dips continue to be absorbed by buyers. Considering the current market conditions, the analyst favors the uptrend scenario, with targets set for higher, previously untested levels around $3.
However, futures trader Dom emphasized that while the $2.10 level has held consistently for several months, significant market shifts on the daily chart are unlikely to occur unless price action moves towards the mid-$2.40 range. This analyst believes that strong price momentum will likely commence once XRP establishes acceptance well above the $2.40 threshold.
Notably, XRP's rally last week encountered resistance just below the $2.40 level, resulting in a price rejection on January 6. This pullback followed substantial net selling activity from whales, amounting to over $100 million, between January 4 and January 7. While whale outflows continue to remain elevated, a discernible shift in their behavior would be necessary for XRP to successfully retest the $2.40 resistance level.
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