Ripple Price Forecast: XRP edges down amid rising exchange reserves, market weakness
- XRP extends losses below the 50-day EMA amid a potential return to risk-off sentiment in the broader crypto market.
- XRP exchange reserves have grown to 2.7 billion tokens, indicating increased selling pressure.
- Steady demand for spot XRP ETFs fails to strengthen the short-term recovery outlook.
Ripple (XRP) is edging lower toward the pivotal $2.00 level at the time of writing on Friday, marking three consecutive days of declines. The sell-off extends across the crypto market, with Bitcoin (BTC) falling toward $95,000 and Ethereum (ETH) pressing down on support at $3,300.
XRP under pressure as exchange reserves surge
The number of XRP coins held across exchanges has increased to 2.7 billion as of Thursday, from 2.67 billion on Monday. Looking back, XRP exchange reserves stood at 2.64 billion on December 29, suggesting holders are transferring the tokens with the intention of selling when the price rises.
According to CryptoQuant, rising exchange reserves indicate higher selling pressure, which could pose an increased risk to price recovery.
Meanwhile, demand for XRP derivatives has remained weak, falling to $3.98 billion on Friday from $4.08 billion the previous day. The OI peaked at a yearly high of $4.55 billion on January 8, a move that happened a couple of days after XRP rose to $2.42. Further decline in the OI could drive the prices lower.
Despite the three-day price correction, institutional sentiment remains relatively positive, as reflected in steady inflows into XRP spot Exchange Traded Funds (ETFs).
US-listed XRP ETFs recorded approximately almost $17 million in inflows on Thursday, up from almost $11 million on Wednesday, according to SoSoValue data. The cumulative inflow stands at $1.27 billion, and the net assets at $1.51 billion, indicating steady investor confidence.
Technical outlook: XRP decline persists as $2.00 support holds
XRP is trading at $2.06 at the time of writing on Friday, as headwinds weigh on the cross-border money remittance token. The 50-day Exponential Moving Average (EMA) at $2.08 caps the immediate upside, preserving the bearish bias.
The Moving Average Convergence Divergence (MACD) has crossed below the signal line on the daily chart, while the histogram bars have turned negative, suggesting downward pressure is building. Bearish influence is poised to increase if the Relative Strength Index (RSI) at 50 on the same chart extends its decline below the midline.
However, closing above the 50-day EMA at $2.08 would ease immediate pressure and open room toward the 100-day EMA at $2.20 and the 200-day EMA at $2.32. Failure to reclaim these barriers keeps the path of least resistance downward.
Ripple FAQs
Ripple is a payments company that specializes in cross-border remittance. The company does this by leveraging blockchain technology. RippleNet is a network used for payments transfer created by Ripple Labs Inc. and is open to financial institutions worldwide. The company also leverages the XRP token.
XRP is the native token of the decentralized blockchain XRPLedger. The token is used by Ripple Labs to facilitate transactions on the XRPLedger, helping financial institutions transfer value in a borderless manner. XRP therefore facilitates trustless and instant payments on the XRPLedger chain, helping financial firms save on the cost of transacting worldwide.
XRPLedger is based on a distributed ledger technology and the blockchain using XRP to power transactions. The ledger is different from other blockchains as it has a built-in inflammatory protocol that helps fight spam and distributed denial-of-service (DDOS) attacks. The XRPL is maintained by a peer-to-peer network known as the global XRP Ledger community.
XRP uses the interledger standard. This is a blockchain protocol that aids payments across different networks. For instance, XRP’s blockchain can connect the ledgers of two or more banks. This effectively removes intermediaries and the need for centralization in the system. XRP acts as the native token of the XRPLedger blockchain engineered by Jed McCaleb, Arthur Britto and David Schwartz.
(The technical analysis of this story was written with the help of an AI tool.)
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