Ripple Price Forecast: XRP bulls defend key support amid waning retail demand and ETF inflows
- XRP ticks up above $1.40 support, but waning retail demand suggests caution.
- XRP attracts $4 million in spot ETF inflows on Thursday, signaling renewed institutional investor interest.
- A weak derivatives market, with futures Open Interest dropping to $2.32 billion, may restrict XRP’s ability to sustain recovery.
Ripple (XRP) is trading above a critical support at $1.40 at the time of writing on Friday, signaling stability ahead of a potential breakout toward the weekly open of $1.48.
The remittance token’s short-term bullish outlook mirrors subtle intraday gains characterising major crypto assets such as Bitcoin (BTC) and Ethereum (ETH).
XRP maintains stability as ETF inflows return
XRP spot Exchange-Traded Funds (ETFs) attracted $4 million in inflows on Thursday, outpacing both Ethereum and Bitcoin ETFs, which saw outflows of $166 million and $130 million, respectively.
The cumulative ETF inflows stand at $1.23 billion, and total assets under management have risen above $1 billion. Despite the mild increase on Thursday, overall sentiment remains shaky, considering net assets have declined from the record $1.65 billion seen in early January.
The XRP derivatives market paints a grimmer picture, with futures Open Interest (OI) falling to $2.32 billion on Friday from $2.45 billion the previous day. For context, retail interest peaked at an annual high of $4.55 billion on January 6, which was significantly below the OI record high of $10.94 billion reached in July.
Notably increased demand from retail traders indicates that investors are confident in XRP’s outlook and its ability to sustain an uptrend. Hence, traders should temper their expectations as futures OI continues to wane.
Technical outlook: XRP holds key support, eyes on a potential breakout
XRP remains above support at $1.40 despite its upside appearing limited by the downward-sloping 50-day Exponential Moving Average (EMA) at $1.69, the 100-day EMA at $1.90 and the 200-day EMA at $2.12.
The SuperTrend indicator on the daily chart holds above XRP, seemingly capping potential rebounds at $1.72. This indicator integrates the Average True Range (ATR) to gauge market volatility and highlight the overall trend.
Until the price rises above the SuperTrend and its colour turns green, the path of least resistance could remain adamantly downward. Subsequently, a daily close below the immediate $1.40 support may accelerate XRP downward toward the October 10 low at $1.25. The February 6 low sits slightly below at $1.12.
Still, the Moving Average Convergence Divergence (MACD) indicator remains above the signal line. At the same time, the green histogram bars expand, hinting at potential stability ahead of a breakout toward the weekly open at $1.48. Other key levels of interest to traders include Sunday’s high at $1.67 and the 50-day EMA at $1.69, which, if reclaimed, could mark a possibly bullish shift.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.
The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.
Recommended Articles
