XRP at $1.90: Is This the Last Chance to Profit Before a Massive Surge or Sink?

As of Friday, Ripple's XRP is experiencing significant pressure in the markets, trading just above its immediate support level of $1.90. This marks a continued decline for the cryptocurrency, which has now fallen for two consecutive days. Despite a slight uptick in inflows to spot exchange-traded funds (ETFs), the overall sentiment among retail investors remains weak, leading to persistent selling pressure.

The downturn in XRP's trading fortunes can be traced back to the catastrophic events of October, when a market crash resulted in the liquidation of more than $19 billion in crypto assets in just one day. The aftermath of this crash has profoundly affected XRP derivatives, with future Open Interest (OI) plummeting from $8.36 billion on October 10 to approximately $3.33 billion as of Friday. This dramatic decline underscores the waning retail interest in XRP.

Efforts by bullish investors to stimulate demand were thwarted earlier this month when OI briefly touched $4.55 billion on January 6, leaving XRP exposed to potential further losses. If the current weakness in derivatives continues, analysts are concerned that prices could drop towards the April low of $1.61.

Even with modest inflows of around $2 million into XRP spot ETFs on Thursday, the overall demand across crypto assets is deteriorating. According to data from SoSoValue, the total inflow for XRP ETFs stands at $1.23 billion, with net assets totaling $1.37 million. Remarkably, US-listed XRP ETFs have shown relative stability, experiencing outflows on only two days recently.

Technical Analysis: XRP Faces Downward Pressure

From a technical standpoint, XRP remains below its 50-day Exponential Moving Average (EMA) of $2.05, the 100-day EMA of $2.17, and the 200-day EMA of $2.30. This consistent underperformance confirms a bearish trend. The critical support level at $1.90 currently provides a buffer against escalating selling pressure. However, the Relative Strength Index (RSI) has dropped to 41, suggesting that bearish forces are largely in control. A further decline in the RSI into oversold territory may accelerate downward movement, potentially testing earlier lows of $1.85 and $1.61.

Moreover, the Moving Average Convergence Divergence (MACD) indicator signals additional selling pressure, as it remains below the signal line. Traders are likely to reduce exposure if the histogram bars below the zero line continue to expand, indicating growing bearish momentum.

The immediate recovery for XRP hinges on maintaining above the $1.90 support level. A robust rebound would be necessary for XRP to reclaim the psychologically significant threshold of $2.00. However, significant resistance remains, with the 50-day EMA capping upward movement at $2.05, followed by $2.17 and $2.30 at the 100-day and 200-day EMAs, respectively.

The fluctuations in XRP’s value reflect a broader trend in the cryptocurrency market, where investor sentiment has been shaken by recent volatility. As the landscape evolves, understanding these dynamics will be crucial for both seasoned investors and newcomers alike.